AT    LOS  ANGELES 


GIFT  OF 

R.    ROB.']RT   riUHTiR 


New  Era  Economics 


PRESENTING  A 


RATIONAL  THEORY  OF  VALUE 


BY 


JOHN  FREDERICK  BROWN,  B.  S. 


Published  and  For  Sale  by  Ihe  Author 
529  EAST  NEW  YORK  ST.,  INDIANAPOLIS,  IND. 
O  .^7  1918 


PRICE: 

IN  PAPER  CXDVBR    -    -        .50 
CLOTH  BOUND    -    -    -    |1.00 


RIGHT  OF  TRANSLATION  RESERVED 


Copyright  1918 
By  JOHN  F.  BROWN 


PreM  of  Hantngton  BC  Folgcr 
IndbmapolU,  Ind. 


CONTENTS 


Part  I.     Introductory. 
Chapter.  Page. 

I.    Scope  and  Function  of  Economics 5 


^  Part  II.    Value. 

C.T) 

T— • 

II.     General  Value  Notions.    Anderson  and 
^  Davenport  on  Value 36 

cc 

°z      III.    Value  Based  on  Labor  of  Standard  Effi- 

ciency 51 

IV.    Economic  Status  of  Professionals   and 

Artists 66 

3        V.     Equal  Value  of,  and  Equal  Compensa- 
tion for  All  Kinds  of  Skilled  Labor 74 

VI.     Equal  Value  of  Skilled  and  Unskilled 
/2  Labor 87 

^^     VII.     No  Labor  Without  Skill.     Present  Ten- 

°  DENCY  Toward  Equal  Compensation 115 

I— 

u. 

o    VIII.     Ultimacy  in  Value.     Summary  of  Value 

Theory  127 

Part  III.     Application. 

IX.    Application  of  Value  Theory.    Some  Ob- 
jections Answered 143 

X.     New  Era  Society.    Further  Applications 

OF  Value  Theory 162 


PART  I. 

INTRODUCTORY. 

Chapter  I. 

Scope  and  Function  of  Economics.* 

Any  fairly  well  informed  person  who  takes 
up  the  study  of  economics  must  be  struck  by  the 
variety  and  the  conflicting  character  of  doctrines 
presented  by  different  schools  of  political  econ- 
omy; and  he  could  not  help  noticing  the  differ- 
ence of  viewpoint,  taken  by  various  writers,  as 
to  what  is  the  proper  function  and  scope  of  the 
science  of  political  economy;  a  difference  which 
necessarily  must  affect  the  deductions  and  the 
teachings  of  the  respective  writers  in  a  marked 
degree.  One  class  of  economists  may  be  credited 
with  a  distinct  desire  to  give  a  moral  side,  or 
content,  to  their  theories.  These  were  unques- 
tionably men  of  strongly  humane  and  kindly 
instincts,  men  who  saw  the  widespread  misery  of 
the  greater  number  of  their  fellow^  beings,  the 
almost  universal  poverty  and  degradation  of  the 
masses,  largely  self-inflicted  perhaps,  but  more 
largely  imposed  by  circumstances,  by  customs, 
and  by  institutions  over  which  the  victims  have 
no  control ;  such  as  the  misfortune  of  sickness  or 


*  Any  reader  of  this  book  who  is  versed  in  economics  is 
advised  to  turn  at  once  to  Part  II,  which  presents  the  au- 
thor's value  theory;  since  that  is  the  part  which,  if  any,  would 
be  of  interest  to  such  a  reader. 


6  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

of  native  incapacity,  of  enforced  idleness,  pre- 
cariousness  of  work,  and  meagerness  of  com- 
pensation, especially  in  the  case  of  unskilled 
labor.  Contemplating  this  widespread  suffer- 
ing, these  large  -  souled  humanitarian  men  took 
thought  and  set  about  enquiring  the  cause,  and 
endeavored  to  find  remedy  and  means  of  better- 
ment. To  this  class  unquestionably  both  Adam 
Smith  and  John  Stuart  Mill  belong;  for,  though 
they  may  not  have  made  any  explicit  statement 
to  that  effect,  yet,  it  seems  to  me  that  a  distinct 
undertone  runs  through  their  books,  indicating  a 
strong  desire  to  be  helpful;  to  improve  condi- 
tions; to  abate  evils  and  errors  which  result  in 
human  suffering;  and  to  assist  in  bringing  about 
a  nearer  approximation  to  economic  justice  than 
obtained  in  their  day.  Besides  being  economists, 
both  Avere  moral  philosophers  and  writers  on 
morals;  Adam  Smith  being  a  teacher  of  such,  as 
Professor  of  Moral  Philosophy  in  Glasgow  Uni- 
versity. 

In  this  class  of  humanitarians  can  also  be 
listed  several  American  economists.  Among 
these  is  Henry  C.  Carey,  author  of  Principles  of 
Social  Science,  on  almost  every  page  of  which 
can  be  noticed  his  intense  desire  to  teach  that 
which  he  believes  essential  to  human  welfare. 
This  is  admirably  expressed  in  the  preface  to 
the  one  volume  manual,  into  which  his  three 
volume  work  has  been  condensed  by  Kate  Mc- 
Kean  (1864).    This,  in  part,  reads  as  follows: 

"Why  do  misery  and  crime  exist?  Why 
when  so  large  a  portion  of  the  earth  is  yet  unoc- 
cupied are  human  beings  suffering  for  food,  and 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  7 

crowded  together  in  unwholesome  dens,  to  the 
sacrifice  of  decency,  comfort  and  health?  Why 
does  one  nation  export  food  of  which  its  own 
members  are  in  need,  while  another  sends  its 
manufactures  throughout  the  world  although 
hundreds  at  home  are  scarcely  clothed?  Why 
are  nations  and  individuals  seen  elbowing  each 
other,  so  to  speak,  for  room  to  live  ?  Why  are  we 
called  on  to  see  everywhere  an  uneasy  jealousy 
among  communities,  each  watching  with  an  un- 
friendly eye  the  expansion  of  the  other — the 
strong  ever  encroaching  upon  the  rights  of  the 
weak?  Why  should  the  chief  European  nations 
wage  a  ceaseless  warfare  against  the  industry 
and  prosperity  of  the  world  at  large?  In  short, 
what  is  the  cause  of  the  measureless  woe  that 
exists  in  this  fair  world  which  the  Creator  pro- 
nounced to  be  very  good  ?" 

"Who  that  has  ever  reflected  upon  human 
affairs  has  not  asked  himself  these  questions,  has 
not  at  some  period  of  his  life  sought  to  solve 
these  problems?  Is  there  no  law  regulating  hu- 
man affairs?  Is  there  no  principle,  broad,  simple, 
comprehensive,  which  can  account  for  all  this 
confusion,  and  reconcile  these  contradictions  ?  If 
so,  where  is  it  to  be  found,  to  whom  has  it  been 
revealed?  Has  the  Newton  of  social  science  not 
yet  appeared?" 

Francis  Wayland,  Professor  of  Economics  and 
Moral  Philosophy,  and  President  of  Brown  Uni- 
versity, prepared  a  textbook  in  the  preface  of 
which  he  says :  "The  principles  of  political  econ- 
omy are  so  closely  analagous  to  those  of  moral 
philosophy  that  almost  every  question  in  the  one 


8  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

may   be   argued   on   grounds   belonging   to  the 
other." 

Wayland  never  loses  a  certain  moral  attitude 
toward  his  subject,  and  he  teaches  it  as  a  means 
to  human  welfare;  and  I  mention  him  here  in 
order  to  list  him  in  the  class  of  humanitarian 
economists. 

Henry  George,  whom  some  would  deny  a 
place  among  economists,  is  another  American 
philosopher  and  writer  on  economics  who  heart 
and  soul  is  intent  on  abolishing  poverty,  and  who 
sought  to  establish  unfailing  employment  and 
general  welfare  by  destroying  monopoly  owner- 
ship of  land  through  his  single  tax  scheme. 

In  the  class  of  humanitarians  also  belongs 
Richard  T.  Ely,  of  Wisconsin  University.  He 
says.  Chapter  I.  of  his  Outline  of  Economics: 

"Animating  the  entire  subject,  blended  of  course 
with  the  love  of  truth  for  truth's  sake  common  to 
all  sciences,  is  the  persistent  hope  that  by  syste- 
matic study  we  may  eventually  abolish  the  mate- 
rial poverty  which  deadens  and  dwarfs  the  lives 
of  millions  of  our  fellows.  Economics  is  a 
science,  but  something  more  than  a  science;  it  is 
a  science  shot  through  with  the  infinite  variety 
of  human  life,  calling  not  only  for  systematic, 
ordered  thinking,  but  for  human  sympathy, 
imagination,  and  in  an  unusual  degree  for  the 
saving  grace  of  common  sense Sat- 
isfaction of  social  need,  not  individual  profit,  is 
the  objective  point  of  the  science." 

"Economics  treats  of  man ;  but  the  supreme 
importance  of  man  in  the  study  of  wealth  has 
not  always  been  appreciated  by  those  who  have 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  9 

expounded  the  science.  Too  often  they  have 
considered  man  simply  as  a  producer  of  weahh 
'by  whom'  the  necessaries,  conveniences,  and 
luxuries  of  life  are  created,  whereas  the  infinitely 
greater  truth  is  that  man  is  the  one  'for  whom' 
they  are  produced." 

"We  do  not  mean  to  say  that  the  whole  prob- 
lem of  human  development  is  the  subject  of 
economics,  but  simply  that  manhood,  rounded 
human  development,  is  the  goal  of  all  social 
sciences,  and  none  must  consider  their  subject 
so  narrowly  as  to  exclude  that  object." 

These  brief  passages  from  Prof.  Ely's  first 
chapter  clearly  indicate  his  humanitarian  attitude, 
and  his  idea  as  to  the  scope  of  economics  and  its 
function  in  the  life  of  mankind;  and  this  puts  him 
in  the  class  of  economists  that  I  speak  of  as 
humanitarians,  as  distinguished  from  the  class 
that  might  be  called  materialistic,  if  not  mam- 
monistic,  as  putting  things  above  men,  and  wealth 
above  welfare.  This  latter  class  seems  to  con- 
sider it  of  the  highest  importance  for  a  nation  to 
figure  large  in  financial  and  economic  statistics; 
to  secure  important  trade  concessions  in  distant 
lands ;  to  hold  great  quantities  of  foreign  securi- 
ties; and,  especially,  to  capture  and  dominate  a 
large  share  of  foreign  markets,  in  order  that 
wealth  may  accumulate,  though  men  decay;  for- 
getful of  the  fact  that  such  a  land  fares  ill,  as 
the  lamented  Oliver  Goldsmith  declared. 

As  examples  of  this  class  of  economists  I  would 
mention  F.  A.  Walker,  who,  in  his  Political  Econ- 
omy, Briefer  Course,  Chapter  I.,  says:  "Political 
Economy  has  to-do  with  no  other  subject  what- 


10  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

ever  than  wealth.  The  economist  may  also  be 
a  social  philosopher,  a  moralist,  or  a  statesman; 
but  not  on  that  account  should  the  several  sub- 
jects be  confounded"  (page  7).  "All  those  things 
which  some  economists  have  called  intellectual 
capital,  and  those  which  by  analogy  might  be 
called  physical  capital,  are  to  be  excluded  from 
the  category  of  wealth.  These  have  seemed  to 
be  things  so  desirable  in  themselves,  so  much  to 
be  preferred  in  any  right  view  of  human  wel- 
fare, that  excellent  writers  have  not  been  able 
to  bring  themselves  to  leave  them  out  of  the  field 
of  economics.  But  political  economy  is  the  sci- 
ence, not  of  welfare,  but  of  wealth"  (page  10). 
"It  cannot  too  strongly  be  insisted  on,  that  the 
economist,  as  such,  has  nothing  to  do  with  the 
question,  what  men  had  better  do;  how  nations 
should  be  governed;  or  what  regulations  should 
be  made  for  their  mutual  intercourse"  (page 
16).  "Great  confusion  has  been  engendered  by 
writers  on  economics  wandering  off  into  discus- 
sions of  political  equity.  The  economist,  as  such, 
has  nothing  to  do  with  the  question  whether 
existing  institutions,  or  laws,  or  customs,  are 
right  or  wrong.  His  only  concern  with  them  is 
how  they  do,  in  fact,  affect  the  production  and 
distribution  of  wealth"  (page  17). 

These  excerpts  sufficiently  indicate  Mr.  Walk- 
er's viewpoint  as  to  the  scope  and  function 
of  economics,  and  a  like  attitude  of  mind  is  evi- 
denced by  Prof.  J.  L.  Laughlin  in  the  textbook 
on  economics  which  he  prepared  for  his  classes, 
and  which  is  a  revision  and  condensation  of 
Mill's   Principles  of   Political  Economy.      This 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  ii 

revision  was  published  in  1884,  and  in  it  Pro- 
fessor Laug^hlin  seems  to  take  particular  pains 
to  correct  the  supposedly  mistaken  humanitarian 
attitude  of  Mill.  But  in  some  of  Laughlin's  later 
writings,  notably  in  his  little  volume  entitled 
"Latter  Day  Problems,"  published  1909,  his  own 
attitude  is  changed  very  much  toward  a  distinctly 
humanitarian  leaning. 

The  greater  number  of  English  economists, 
especially  of  the  "lassez  faire"  school,  Senior, 
Fawcett,  McCulloch,  Mallock,  all  maintain  an 
attitude  of  indifference  and  aloofness  from  hu-- 
mane  reform  ideas,  as  having  no  connection  with 
economics;  and  they  have  formulated  that  "dis- 
mal" science  against  which  Ruskin  and  Carlyle 
thundered  their  denunciations.  Carlyle,  in  Past 
and  Present,  Book  III,  chap.  9,  p.  228,  says: 
"The  saddest  news  is  that  we  should  find  our 
national  existence  depend  upon  our  selling  manu- 
factured cotton  at  a  farthing  an  ell  cheaper  than 
any  other  people;  a  most  narrow  stand  for  a 
great  nation  to  base  itself  on.  Think  of  a  nation 
which  fancies  it  must  die  if  it  do  not  undersell 
all  other  nations  to  the  end  of  the  world!"  And 
on  page  326:  "It  is  for  others  to  know  in  what 
specific  ways  it  may  be  possible  to  interfere, 
with  time-bills,  factory-bills,  and  other  such  legis- 
lation, between  workers  and  employers ;  the  pres- 
ent editor  (Carlyle)  knows  not;  he  knows  only 
and  sees,  what  all  men  are  beginning  to  see,  that 
legislative  interferences,  quite  a  number,  are  in- 
dispensable, that  the  lawless  anarchy  of  supply 
and  demand  can  no  longer  be  tolerated."  See 
also  Ruskin's  "Unto  this  Last". 


12  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

I  have  begun  this  essay  by  pointing  out  that  at 
the  very  threshold  of  the  science,  at  the  initial 
question:  what  is  it  about,  and  for  what  pur- 
pose, economists  are  a  house  divided  against  it- 
self. And  in  chapter  II,  I  shall  show  that  on  the 
question  of  value  economists  are  very  much  at 
sea;  so  much,  that  several  have  openly  declared 
the  value  question  to  be  an  unsolved  problem. 
Since  this  essay  must  be  brief,  and  mainly  de- 
voted to  a  discussion  of  what  I  have  termed  a 
rational  theory  of  value,  which  is  presented  in 
Part  II,  I  will  here  but  lightly  touch  on  several 
fundamental  errors  which  have  more  or  less 
direct  connection  with  current  theories  of  value. 
My  contention  is  that  present  value  concepts  and 
theories  are  incomplete,  and  wholly  inadequate 
for  making  them  what  they  should  be — the  basis 
and  foundation  of  the  entire  economic  science. 
This  insufficiency  of  the  generally  accepted  value 
concepts  is  due,  I  contend,  to  several  funda- 
mental errors;  and  to  false  ideas  concerning  the 
relations  of  man  to  man,  the  rights  and  duties  of 
individuals,  and  the  claims  and  duties  of  society. 
These  errors  and  false  notions  have  naturally 
been  shared  by  writers  on  economics,  and  are 
reflected  in  their  value  concepts.  But  be  it  re- 
membered that  much  of  what  we  of  today  speak 
of  as  errors  and  false  ideas,  in  times  past  was 
accepted  as  truth  and  as  sound  sense,  and  in  one 
way  indeed  was  such.  It  is  today  a  mere  com- 
monplace to  say  that  in  the  passage  of  time,  along 
with  industrial,  political,  and  intellectual  progress, 
the  human  race  undergoes  a  continuous  change 
of  viewpoint;  change  in  its  sense  of  right  and 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  13 

wrong;  and  in  its  general  notions  as  to  man's 
place  in  nature,  as  well  as  to  his  place  in  the 
social  fabric.  Summing  up  the  total  of  senti- 
ments, ideals,  desires,  beliefs,  aspirations,  and 
aims  of  any  given  time  and  place,  and  calling 
that  the  spirit  of  that  age  or  time,  all  individuals 
living  at  such  time  and  place  are  largely  domi- 
nated by  that  spirit;  especially  is  the  written 
thought  marked  by  the  spirit  of  its  respective  age, 
at  least  that  part  of  the  written  thought  which 
finds  acceptance  and  currency.  And  naturally  the 
writers  on  economics  were,  generally  speaking,  in- 
fluenced by,  and  reflect  this  spirit  of  their  age  in 
their  theory  of  value,  as  well  as  in  their  economics 
in  general.  No  value  theory,  evolved  under  the 
influence  of  a  society  based  on  slave  labor,  could 
prove  acceptable  in  a  free  labor,  or  wage  labor, 
age.  The  undisputed  private  ownership  of  land 
gives  a  basis  for  rent,  and  for  a  theory  of  rent, 
and  afifects  current  theories  of  value ;  but  the  rent 
theory  will  collapse,  and  value  theories  will  be 
modified,  should  private  ownership  of  land  be 
abolished  or  materially  restricted.  No  theory 
of  value  can  obtain  currency  or  force  if  it  con- 
flicts with  general  notions  and  customs;  it  must 
accord  with  the  spirit  of  its  age. 

The  value  theory  that  I  shall  here  present  could 
not  possibly  have  been  accepted  before  these  lat- 
ter days,  and  it  remains  to  be  seen  whether  the 
times  are  now  ripe  for  its  acceptance.  I  hope  so, 
for  I  verily  believe  that  economic,  intellectual  and 
moral  progress  is  halted  because  of  the  absence 
of  a  true  and  socially  vitalizing  theory  of  value. 
Moreover,  political  economy  is  today  without  an 


14  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

undisputed  theory  of  value;  confessedly,  value  is 
still  a  disputed  question  among  economists,  and 
by  some  acknowledged  as  an  unsolved  problem. 

To  solve  this  problem,  and  to  point  out  erro- 
neous premises  which  hinder  the  solution  of  this 
problem,  is  the  task  I  have  undertaken  in  this 
essay.  The  first  of  these  false  premises,  that 
economics  has  nothing  to  do  with  welfare  but 
only  deals  with  wealth  and  nothing  else  than 
wealth,  has  already  in  part  been  discussed;  and 
it  was  pointed  out  that  here,  right  at  the  begin- 
ning of  the  study,  there  is  dispute  and  disagree- 
ment among  present  as  well  as  among  past  teach- 
ers of  economics,  depending  upon  the  personal 
leaning  and  viewpoint  of  the  respective  writers. 
This  divergence  of  opinion  shows  that,  strictly 
speaking,  economics  is  not  a  science ;  that  its  dicta 
are  expressions  of  opinions,  rather  than  of  proven 
or  provable  facts;  and  that  it  is  called  a  science 
by  courtesy  and  for  convenience.  It  is  a  study 
and  discussion  of  theories  rather  than  a  science. 
Economics  is  not  in  the  class  of  exact  sciences  like 
mathematics,  chemistry,  and  physics,  the  propo- 
sitions of  which  can  be  proven  on  the  blackboard 
or  demonstrated  by  experiments  in  the  laboratory. 
The  most  that  can  be  done  with  the  propositions 
of  economics  is  to  reason  them  out  to  a  convinc- 
ing degree  of  self-evidency,  such  as  will  satisfy 
the  average  intelligence;  and  any  subsequent  ex- 
periment requires  the  consent  of  whole  communi- 
ties, and  usually  takes  decades  of  time  to  prove 
out.  It  is  therefore  quite  natural  that  the  opin- 
ions of  economists  should  vary,  and  vary  widely, 
according  to  personal  idiosyncracy ;  and  it  would 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  15 

consequently  be  foolish  to  judge  harshly  of  econo- 
mists. And  since  in  the  nature  of  the  case  I 
shall  have  to  criticize  their  reasoning  and  reject 
many  of  their  conclusions,  I  take  occasion  here 
to  declare  that  I  hold  these  men  in  as  high  regard 
as  any  other  set  of  men  who  have  labored  and 
spoken  according  to  their  best  knowledge  and 
belief;  and  that  nothing  I  may  have  to  set  down 
against  their  teaching  is  set  down  in  a  spirit  of 
personal  detraction,  but  solely  to  combat  what 
I  claim  to  be  erroneous  belief. 

Let  us  resume  then  the  discussion  of  what  is, 
in  reason  and  common  sense,  the  true  scope  and 
purpose  of  economics.  This  is  so  admirably  set 
forth  by  Professor  Ely  in  Chapter  I.  of  his  Out- 
line of  Economics,  from  which  I  have  quoted  ? 
few  passages,  that  I  feel  unable  to  add  anything 
worth  while  to  what  he  there  has  said.  But  it 
would  hardly  be  proper  here  to  reproduce  that 
entire  chapter ;  and  inasmuch  as  some  readers  of 
this  essay  may  not  have  ready  access  to  Profes- 
sor Ely's  work,  I  shall,  in  my  own  way,  present 
such  arguments  as  are  at  my  command,  to  con- 
vince them  that  those  who  declare  that  econom- 
ics has  nothing  to  do  with  welfare  but  only  deals 
with  wealth  are  wrong;  that  they  start  wrong, 
at  the  very  beginning  of  their  inquiry,  and  that 
they  necessarily  must  end  with  various  erroneous 
conclusions. 

For  whom  are  houses  built;  roads  and  streets 
made;  ships,  railroads  and  bridges  built;  crops 
sown  and  harvested;  schools,  libraries,  and  other 
institutions  established?  These  questions  answer 
themselves.    It  is  evident  to  the  commonest  Intel- 


i6  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

ligence  that  all  these  works  of  man  are  for  man, 
for  his  use  and  benefit;  to  give  him  food,  cloth- 
ing, shelter,  comforts,  education  and  recreation.* 
And  if,  because  of  some  hitch  in  the  social 
mechanism,  these  things,  the  constituents  of 
wealth,  at  some  points  accumulate  to  a  glut;  and 
if  this  excess  of  wealth  condemns  the  very  pro- 
ducers of  that  wealth  to  unemployment  and 
consequent  want  and  distress,  that  simply  shows 
how  badly  economists  have  blundered.  It  shows 
how  poorly  they  have  done  their  work,  how  they 
have  been  groping  in  the  dark,  and  how  they  have 
failed  to  teach  the  world  sane  and  wise  economics. 
The  opinion  that  things  constitute  a  considera- 
tion superior  to  man,  superior  at  least  to  the 
common  man,  the  lower  ranks  of  laborers;  that 
the  things  of  wealth,  in  absolute  and  unques- 
tioned control  of  private  owners,  must  be  and 
are  the  foremost  consideration,  regardless  of 
public  welfare  or  distress;  such  an  opinion  can 
be  accounted  for  only  on  the  ground  that  men 
have  been  in  the  habit  of  beholding  just  that  state 
of  afifairs  for  many  generations,  and  therefore 
could  not  believe  that  anything  else  was  possible. 
The  land  and  its  yield  belonged  to  the  king,  the 
nobles,  the  squire  or  other  proprietor;  and  these 
exercised  an  unquestioned  right  to  dispose  of  the 
crops  as  they  thought  best  for  their  own  interest 
or  pleasure;  so  also  did  the  manufacturer  and 
the  merchant  with  their  wares.  The  welfare  of 
the  populace  was  a  matter  of  small  concern;  the 


*  Even  religion  and  the  church  is  for  man.  Jesus  said: 
The  Sabbath  was  made  for  man,  and  not  man  for  the  Sab- 
bath.    Mark  lH . 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  17 

Utmost  that  was  considered  feasible  in  their  be- 
half was  the  establishment  of  almshouses.  But 
to  increase  the  wealth  of  kings  and  proprietors, 
and  the  profits  of  manufacturers  and  merchants, 
that  engaged  the  thought  and  attention  of  early 
economists;  and  some  present  day  ones  have  not 
outgrown  that  mental  attitude.  Possibly  this 
despotism  of  private  ownership  and  private  inter- 
est was  an  historical  necessity;  was  the  right 
thing  at  the  right  time;  right  because  neces- 
sary; right  because  comporting  with  the  then 
existing  state  of  general  human  development. 
But  right  no  longer  than  necessary;  and  neces- 
sary no  longer  than  till  general  human  develop- 
ment reaches  a  stage  where  man  is  fit  for  coopera- 
tion, for  brotherliness  instead  of  antagonism,  fit, 
in  a  word,  for  the  cooperative  commonwealth. 

I  quote  here,  as  bearing  upon  this  particular 
thought,  a  passage  from  Mill,  Principles  of  Po- 
litical Economy,  p.  19:  "It  often  happens  that 
the  universal  belief  of  one  age  of  mankind — a 
belief  from  which  no  one  was,  nor  without  an 
extraordinary  effort  of  genius  and  courage  could, 
at  that  time  be  free — becomes  to  a  subsequent 
age  so  palpable  an  absurdity,  that  the  difBculty 
then  is  to  imagine  how  such  a  thing  could  ever 
have  appeared  credible." 

But  I  shall  not  pursue  this  line  of  thought 
further ;  suf^ce  it  to  say  that  the  true  philosopher 
and  teacher  of  mankind  is  not  content  to  describe 
things  as  they  are,  but  labors  to  reason  out  how 
things  ought  to  be.  Likewise,  the  forward  look- 
ing economist  will  not  merely  describe  the  eco- 
nomics that  was  and  that  is,  but  also  the  econom- 


iS  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

ics  that  ought  to  be  and  will  be ;  and  he  who  puts 
men  above  things,  and  welfare  above  wealth,  that 
economist  has  his  face  set  in  a  direction  which 
unquestionably  is  the  right  one. 

Besides  this  initial  error  of  a  false  idea  as  to 
the  scope  and  mission  of  political  economy,  there 
are  several  other  errors,  shared  in  greater  or  less 
degree  by  practically  all  accredited  economists, 
errors,  which  have  more  or  less  of  a  bearing  upon 
their  value  concepts  and  their  theories  of  value; 
inasmuch  as  the  value  theory  of  any  economist 
is  built  up  of  and  embodies  most  of  his  funda- 
mental economic  notions.  Some  of  these  errors 
connect  closely  with  the  initial  one  regarding  the 
proper  function  of  economics ;  others,  pertaining 
to  wages,  capital,  labor,  supply  and  demand,  are 
of  a  class  that  I  call  half-truths,  being  made  up 
part  of  truth  and  part  of  error,  and  which,  just 
because  they  contain  partial  truths,  are  the  more 
perversive,  since  they  mislead  men  into  accepting 
them  as  complete  truths.  Looking  back  at  the 
early  economists  of  the  eighteenth  century,  it 
seems  that  they  assumed  the  economic  and  social 
conditions  of  their  time  to  be  fixed  and  unchange- 
able. They  described  and  explained  things  as 
they  found  them ;  and  it  did  not  occur  to  them  to 
describe  things  as  they  might  be  improved,  and 
how  conditions  might  be  made  better,  juster,  and 
humaner  for  the  lowly  masses.  Hence  their  so- 
called  science  became  largely  an  attempt  to  justify 
as  necessary  and  inevitable  all  social  wrongs,  op- 
pressions, and  despotisms.  The  absolute  despot- 
ism of  kings  and  nobles  was  accepted  as  natural 
and  inevitable.     And  when  later  the  despotism 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  19 

of  aristocracy  was  superseded  by  the  despotism 
of  wealth,  ot  private  ownership  of  natural  re- 
sources, the  despotism  of  private  control  of  the 
means  of  life  and  labor,  then  this  was  also  ac- 
cepted as  natural  and  necessary;  and  all  the  evil 
consequences  to  the  disinherited  masses,  engen- 
dered thereby,  were  likewise  apologized  for  as 
inevitable  and  beyond  remedy.  And  we  see  that 
especially  the  so-called  orthodox  lassez  faire 
school  of  economists  of  the  nineteenth  century 
were  mainly  busy  with  explaining  as  unavoid- 
able all  the  industrial  misery  of  their  time;  the 
poverty  and  wretchedness  of  the  lowly  toilers  on 
farm  and  field,  in  mill  and  mine;  their  starvation 
wages ;  their  slum  habitations ;  and  the  toil  slavery 
of  their  women  and  children.  Economists  apolo- 
gized for  all  these  things  as  being  inevitable,  and 
therefore  justified;  and  also  as  necessary  for  the 
commercial  prosperity  and  glory  of  England, 
since  she  was  by  these  means  able  to  undersell 
other  nations  in  the  markets  of  the  world.  This 
reprehensible  work  of  economists  is  a  direct  out- 
growth and  consequence  of  the  false  idea  of  put- 
ting wealth  above  welfare,  and  things  above  men, 
instead  of  making  man  and  his  welfare  the  end 
and  aim  of  all  work  and  effort,  of  all  knowledge 
and  philosophy.  And  economists  who  fail  to  do 
this,  who  mistakenly  follow  the  opposite  course, 
thinking  thereby  to  give  their  subject  a  truly 
scientific  character,  merely  prove  themselves  to 
be  blindly  groping  pedants;  and  the  probability 
is  that  they  may  soon  find  themselves  and  their 
alleged  science  relegated  to  the  limbo  of  things 
discarded  and  forgotten. 


20  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

Another  error,  coincident  with  the  foregoing, 
was  the  superciHous  mental  attitude  of  the  edu- 
cated and  the  ruHng  classes  toward  the  common 
man  and  the  laborer.  What  rights  had  these 
a  claim  to  anyhow,  in  society  and  in  life?  To 
what  consideration,  if  any,  were  they  entitled? 
What  were  they  here  for  on  this  earth?  Owing 
to  their  numbers,  their  interests  should  have  had 
first  place  in  the  consideration  of  public  policy 
and  endeavor;  but  it  was  not  even  conceded  that 
they  might  claim  to  be  here  for  their  own  sake 
and  for  their  own  welfare.  They  are  here  to 
provide  soldiers,  thought  the  rulers.  They  are 
here  to  produce  wealth,  subsistence  and  luxuries 
for  us,  said  the  land  owners,  the  bankers  and  the 
captains  of  industry  and  their  spokesmen,  the 
orthodox  economists.  They  were  regarded  by 
economists  as  producers  of  wealth  with  much  the 
same  feeling  and  consideration  with  which  a 
farmer  regards  his  pigs  as  producers  of  pork. 
Even  the  best  of  economists,  such  well-meaning 
men  as  Adam  Smith  and  J.  S.  Mill,  in  their  rea- 
soning treated  the  laborer  as  a  commodity.  Per- 
haps they  did  this  somewhat  unconsciously,  but 
they  did  so  none  the  less  when  using  the  terms 
"labor"  and  "laborers"  synonymously.  Mill,  in 
his  "Principles,"  p.  554,  has  this  statement: 
"There  are  commodities  which,  though  being 
capable  of  increase  and  decrease  to  a  great  extent, 
their  value  always  depends  upon  demand  and  sup- 
ply. This  is  the  case  in  particular  with  the  com- 
modity labor."  When  speaking  of  the  supply  or 
increase  of  labor,  they  mean  the  supply  or  in- 
crease of  laborers,  of  men.     These  two,  labor. 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  21 

the  activity,  and  the  laborer,  he  who  exerts  that 
activity,  are  so  conjoined  they  cannot  be  sepa- 
rated in  actual  life,  and  they  are  so  identical  in 
economic  reasoning,  that  when  you  make  a  com- 
modity of  one,  the  other  becomes  a  commodity 
also. 

By  making  labor,  and  with  it  the  laborer,  a 
commodity,  economists  have  in  their  reasoning 
reduced  the  laborer  to  a  thing,  a  soul-less,  will-less 
thing;  or,  at  best,  a  mere  work  animal  without 
selfhood  and  conscious  life  purpose;  a  creature 
to  be  used  and  directed  by  others  as  they  see  fit, 
and  as  suits  their  advantage.  I  said  economists 
have  in  their  reasoning  reduced  the  laborer  to 
this;  perhaps  it  would  be  more  correct  to  say 
that  they  found  him  thus,  and  that  they  left 
him  so,  as  far  as  their  science  is  concerned.  They 
assigned  to  the  laborer's  life  hardly  anything 
beyond  this :  to  work,  eat,  sleep,  and  to  propagate 
his  species,  so  as  to  keep  up  the  supply  of  laborers 
somewhat  in  excess  of  the  actual  need;  and  they 
deduced  a  law  of  subsistence  wages,  the  so- 
called  "iron  law  of  wages,"  which  was  supposed 
to  cut  off,  automatically,  the  excess  supply  of 
laborers,  by  a  process  of  slow  starvation.  I  do 
not  know  whether,  as  an  actual  fact,  men  in  any 
great  number  were  ever  reduced  to  such  a  low 
standard  of  life  as  these  economists  would  make 
us  believe  is  the  natural  and  inevitable  level  to 
which  competition  and  economic  self-adjustment 
must  necessarily  bring  the  laborers.  Perhaps  the 
conditions  in  England  during  the  first  half  of 
the  nineteenth  century  were  largely  so,  as  this 
seems    indicated   bv   various    utterances    in    the 


22  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

literature  of  that  time;  such  as:  Hood's  Song 
of  the  Shirt,  Shelly's  To  the  Men  of  England, 
Tennyson's  Maud;  by  novelists  like  Dickens; 
and  by  essayists  like  Ruskin  and  Carlyle,  who 
scathingly  criticized  the  political  economy  of 
their  day,  which  knew  no  remedy  and  which 
called  these  conditions  inevitable.  But,  certainly, 
in  no  Anglo-Saxon  country  do  any  such  condi- 
tions obtain  today,  nor  in  any  of  the  advanced 
European  countries;  and  any  political  economy 
which  assumes  this  bare  subsistence  as  a  law  of 
wages,  and  on  such  a  labor  cost  bases  its  theory 
of  value,  I  hold  is  utterly  absurd,  and  absolutely 
out  of  date. 

We  find  then  that  the  economics  of  those  days 
was  merely  descriptive  of  what  it  saw,  rather 
than  instructive  as  to  better  ways  and  better 
things  that  might  be;  that  the  advance  made  by 
man  in  his  economic  condition  was  made  with- 
out help  from  this  alleged  science,  made  rather 
in  spite  of  the  political  economy  of  that  period 
and  the  pronouncements  of  its  professors  and 
teachers.  If  political  economy  cannot  instruct 
the  race  how  to  establish  general  welfare;  how 
to  eradicate  that  socio-economic  disease  poverty; 
but  only  can  describe  it  and  tell  us  it  is  here,  then 
of  what  use  is  it?  It  must  stand  as  discredited 
as  would  stand  a  medical  science  which  did  not 
endeavor  to  cure  disease,  but  was  content  merely 
to  describe  it. 

While  the  Malthusian  theory  of  a  bare  sub- 
sistence condition  for  labor  is  contrary  to  the 
general  facts  of  human  life  in  modern  times,  and 
repugnant  to  reason  when  presented  as  a  funda- 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  23 

mental  principle  in  economics,  as  something 
natural  and  unalterable,  it  is  none  the  less  a 
partial  truth;  and  it  has  withstood  all  the  fierce 
attacks  made  upon  it  on  the  mistaken  assumption 
that  it  was  wholly  false.  The  trouble  was  that 
the  opponents  of  this  theory,  that  population  tends 
to  outrun  subsistence,  did  not  realize  that  it  was 
a  contingent  truth;  that  it  contains  elements  of 
truth  as  well  as  of  error.  And  instead  of  sepa- 
rating the  true  from  the  false,  they  wasted  their 
words  in  vain  attempts  to  disprove  it  in  toto, 
largely  on  sentimental  and  religious  grounds. 
For,  granting  the  assumed  premises  of  the  Mal- 
thusian  theory,  that  the  mass  of  men  exist  on  a 
plane  of  life  like  unto  an  animal,  to  eat,  sleep, 
and  to  gratify  their  sexual  impulses,  regardless 
of  consequences ;  and  that  as  a  result  they  propa- 
gate and  increase  in  numbers  to  the  maximum 
bearing  capacity  of  their  females ;  granting  these 
premises,  the  Malthusian  conclusion,  that  the 
number  of  men  will  tend  to  exceed  the  sources 
of  subsistence  is  undeniably  true.  This  is  true  at 
least  in  all  countries  outside  the  tropics,  in  the 
very  countries  and  nations  for  whom  the  science 
of  economics  was  formulated.  But  the  moment 
these  premises  are  proven  to  be  false,  or  proven 
to  be  no  longer  true,  that  moment  the  Malthusian 
subsistence  and  population  theory  with  all  its 
attendant  consequences  falls  to  the  ground.  Now 
I  contend  that  these  premises  have  largely  ceased 
to  exist  as  an  actual  and  general  fact  of  human 
life,  and  that  they  are  disappearing  more  and 
more  from  day  to  day;  hence,  the  Malthusian 
theory  of  population  and  subsistence  limit  has 


24  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

become  obsolete^  has  lost  validity;  and  with  this 
has  been  lost  the  basis  of  some  of  the  fundamental 
ideas  of  conventional  political  economy. 

It  is  pertinent  to  remark,  in  connection  with 
the  elimination  of  the  premises  upon  which  the 
Malthusian  theory  rests,  that  economists,  as  such, 
are  guilty  of  a  sin  of  omission ;  inasmuch  as  they 
have  done  nothing,  as  far  as  I  have  been  able 
to  discover,  toward  promoting  that  elimination, 
in  any  direct  and  courageous  way,  such  as 
would  become  teachers  and  leaders  in  human 
progress.  It  is  true,  they  have  declared  that  ex- 
cessive numbers  of  laborers  cause  low  wages,  and 
a  low  value  of  labor,  because  bi  the  excessive 
supply;  but  this  has  been  done  more  in  justifi- 
cation of  low  wages,  rather  than  as  a  warning  to 
laborers  to  keep  down  their  number.  I  am  not 
aware  of  any  economist  who  has  advocated  re- 
striction of  immigration,  import  of  laborers; 
rather  they  all  advocate  mobility  of  labor.  It 
should  flow  readily  to  such  places  and  to  such 
employments  where  wages  are  higher,  they  say, 
unmindful  of  the  fact,  that,  according  to  their 
own  reasoning,  such  an  influx  of  labor  would  de- 
press wages  in  those  places  and  employments. 
While  they  vaguely  hint  at  the  imprudence  of  a 
high  birth  rate,  none  of  them  distinctly  advises 
a  birth  rate  controlled  by  deliberate,  preventive 
means.  The  gratuitous  advice  to  the  lower 
orders  to  restrain  the  increase  of  their  numbers 
by  practicing  sexual  abstinence  is  as  useless  and 
as  silly  as  it  would  be  to  tell  them  to  meet  a  food 
shortage  by  eating  only  one  meal  a  week.  It 
may  be  noted,  however,  that  a  controlled  birth 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  25 

rate  is  becoming  the  practice  in  all  leading  coun- 
tries, especially  among  the  more  enlightened 
classes  in  those  countries;  and  the  time  is  per- 
haps not  distant  when  political  economy  will  have 
to  fall  in  line  and  take  a  definite  stand  on  this 
very  important  detail  of  general  human  welfare, 
as  well  as  one  on  the  related  question  of  immi- 
gration restriction. 

Closely  connected  with  the  false  notion  con- 
sidered in  the  foregoing  paragraphs,  the  notion 
that  classes  labor  as  a  commodity  and  reduces 
the  laborer  to  a  mere  thing,  is  another  false  no- 
tion, and  a  false  mental  attitude  toward  the  la- 
boring masses  on  the  part  of  their  advisers  and 
would-be  friends,  a  sort  of  patronizing  master 
and  servant  attitude.  I  do  not  assert  that  recog- 
nized economists  hold  such  an  attitude;  it  is  true 
rather  of  the  acrimonious  critics  of  conventional 
and  accepted  economics,  such  as  Ruskin  and  Car- 
lyle,  and  is  shown  in  their  rather  phantastic  ex- 
hortations. The  proposals  of  Ruskin  and  Car- 
lyle,  if  the  latter  can  be  said  to  have  submitted 
proposals,  are  distinctly  characterized  by  a  patri- 
archal master  and  servant  sentiment.  Both  take 
the  master  class,  the  rulers  of  political,  financial 
and  business  afifairs,  to  task,  for  not  assuming  a 
patriarchal  and  providential  attitude  toward  the 
laborers;  and  for  not  shouldering  responsibility 
for  their  maintenance  the  year  round,  at  some 
employment,  profitable  or  unprofitable,  and  if 
necessary  at  a  bare  subsistence  wage.  At  the 
same  time  they  exhort  the  laborers  to  humble 
contentment  with  whatever  lot  fate  or  God  Al- 
mighty has  appointed  them.    This  notion  is  closely 


26  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

akin  to  the  wages  fund  fallacy;  and  while  this 
notion  is  preferable  to  the  utter  indifference  of 
the  thoroughgoing  lassez  faire  economist,  it  is 
distinctly  at  variance  with  the  democratic  spirit 
of  today,  a  spirit  which  even  in  the  days  of  Rus- 
kin  and  Carlyle  was  strongly  in  evidence,  and 
which  is  gaining  force  every  passing  year;  a 
spirit  whose  very  essence  is  the  feeling  that  one 
man  is  as  good  as  the  other;  and  that  he  has  an 
unquestionable  right  to  an  equal  standing  before 
the  law  and  before  the  ruler  of  destiny.  Imbued 
with  this  spirit,  no  man  worthy  the  name  is  will- 
ing to  stand  before  another  man  as  a  mendicant 
and  an  object  of  charity,  as  a  beggar  for  leave 
to  work;  the  more  so,  as  the  impression  is  daily 
gaining  ground  that  this  other  man  is  a  despoiler 
and  a  parasite  upon  the  one  who  is  expected  hum- 
bly to  ask  for  employment. 

The  thought  that  the  laboring  poor  are  of 
necessity  and  in  the  nature  of  things  beholden 
to  the  well-to-do  for  work  is  part  and  parcel 
of  the  wages  fund  theory;  a  theory,  that  it  is 
the  possessing  class,  the  landowners  and  the  pos- 
sessors of  much  money,  that  it  is  these  who 
furnish  employment  for  the  masses,  as  wxll  as 
the  necessary  capital  for  such  employment,  the 
wages  fund.  T  have  referred  to  this  as  a  fallacy, 
and  I  shall  briefly  point  out  that  while  there  is 
some  truth  in  this  theory  it  is  but  a  half  truth; 
and,  as  such,  it  is  even  more  harmful  than  a  com- 
plete fallacy,  inasmuch  as  men  have  accepted  it 
as  wholly  true,  and  have  based  economic  beliefs 
on  this  foundation.  It  is  true  that  permission 
to  till  the  soil  for  the  raising  of  food,  granted 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  27 

Upon  the  condition  of  a  tribute  called  rent,  then 
as  in  our  day,  depends  upon  the  readiness  and 
consent  of  the  landowner.  And  considering  that 
such  owner  often  furnished  seed,  implements,  live 
stock,  and  housing,  and  in  many  cases  directed 
and  supervised  the  labor  of  tillage,  it  was  quite 
natural  to  look  upon  the  landlord  as  the  one  who 
provides  employment  for  the  farm  laborer.  But 
when  in  the  course  of  time  "the  thoughts  of  men 
are  widened"  and  the  propriety  of  private  owner- 
ship of  land  is  called  in  question;  when  it  is 
asked  in  all  seriousness:  does  private  ownership 
of  land  any  longer  conduce  to  human  welfare; 
also,  how  and  in  what  manner  did  these  men  or 
their  ancestors  secure  title  to  these  lands;  and 
are  not  these  lands  in  all  reason  the  common 
heritage  of  the  race,  then  the  landlord  will  be 
seen  as  a  supernumerary,  and  no  one  will  credit 
him  with  furnishing  employment  for  labor.  He 
will  disappear  from  the  stage  of  life  and  from 
the  pages  of  economic  textbooks,  and  also  from 
the  reasonings  of  economists  as  a  factor  in  value 
determinations. 

In  similar  manner  it  can  be  shown  that  the 
commonly  accepted  maxims  of  economists,  that 
capital  is  the  result  of  the  capitalist's  abstinence: 
and  that  capitalists  provide  a  wages  fund  and 
thus  furnish  labor  with  employment,  and  that 
this  employment  is  limited  by  the  amount  of 
available  capital ;  these,  it  can  be  shown,  are  half 
truths,  containing  much  undeniable  truth,  but 
also  a  great  deal  of  error.  And  these  maxims 
become  more  pronouncedly  false,  as  men  develop 


28  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

into  greater  fitness  for  a  higher  and  more  orderly 
state  of  society. 

It  is  true  that  some  capital  is  the  result  of 
saving  and  abstinence  on  the  part  of  the  owner. 
But  this  is  by  no  means  true  of  the  accumula- 
tions from  profitable  deals  and  speculative  ma- 
nipulations, of  excessively  large  fees  or  salaries 
and  the  profits  from  stock  or  rental  property, 
from  which  the  holder  may  "save"  capital  with- 
out abstinence  on  his  part  in  any  true  sense  of 
the  word.  In  so  far  as  any  abstinence  is  involved 
in  such  cases,  that  abstinence  is  practiced  by 
proxies,  by  those  who  pay  the  large  fees,  salaries, 
or  profits,  or  upon  whose  labor  such  profits  are 
made.  It  is  true  that,  downright  robbery  ex- 
cluded, no  nation  or  community  can  accumulate 
capital  except  by  saving,  by  abstaining  from  con- 
suming all  the  wealth  it  produces.  Stating  this 
in  other  words,  no  nation  can  accumulate  capital 
unless  a  considerable  part  of  its  active  labor  is 
devoted  to  the  production  of  tools,  machinery, 
appliances,  transportation  facilities,  etc.,  so- 
called  capital  goods,  as  distinguished  from  con- 
sumption goods ;  the  latter  being  such  as  are  im- 
mediately or  shortly  consumed,  mainly  food  and 
clothing,  daily  or  yearly  necessaries  and  luxuries. 
All  this  is  true,  but  it  is  absurd  and  utterly  false 
therefore  to  conclude  that  all  existing  capital  is 
the  result  of  saving  and  abstinence  on  the  part 
of  the  present  owners,  and  that  no  capital  could 
be  accumulated  and  become  available,  except  by 
promising  the  rewards  of  interest,  rent  and  profit, 
as  an  inducement  for  private  individuals  to  ab- 
stain and  to  save.     It  shall  not  be  denied  that 





SCOPE  AND  FUNCTION  OF  ECONOMICS.  29 

this  has  been  an  effective  motive  in  the  past,  as 
well  as  being  so  today,  for  abstaining,  and  thus 
making  available  necessary  funds  of  capital.  This 
is  the  economics  of  the  past  and  of  the  present. 
But  the  economics  of  the  future  discerns  the 
possibility  of  providing  necessary  capital  funds 
iDy  community  abstinence  and  saving,  instead  of 
by  individual  savers;  whence  also  the  fruits  of 
that  saving  will  redound  to  the  community  in- 
stead of  to  private  individuals,  whatever  form 
that  fruitage  in  the  development  of  things  may 
take. 

As  a  matter  of  fact,  community  abstinence  and 
saving  has  already  for  a  long  time  been  operative 
in  the  form  of  certain  taxes  and  assessments 
for  public  improvements ;  such  as  sewers,  streets, 
parks,  bridges,  harbors,  and  for  schools.  Inter- 
est bearing  bonds  are  often  issued,  more  quickly 
to  raise  the  funds  for  such  purposes.  These 
bonds,  upon  which  the  holders  have  advanced 
money  to  the  community,  that  is,  capital,  sub- 
sistence fund,  or  wages  fund  if  you  wish  to  call 
it  that,  will  have  to  be  redeemed;  that  is,  the 
loan  has  to  be  repaid  at  maturity,  and  interest 
payments  have  to  be  made  at  stated  intervals; 
and  the  money  for  such  interest  as  well  as  for 
final  repayment  of  the  loan  is  raised  by  taxation 
of  the  community ;  this  implies  abstinence,  saving, 
renunciation,  on  the  part  of  the  taxpayer.  It  is 
no  wild  dream  to  assume  that  in  the  near  future 
communities  will  endeavor  to  raise  this  money, 
this  capital,  by  the  required  taxation  in  the  first 
place;  instead  of  borrowing  from  bondholders, 
then  pay  interest  for  a  term  of  years,  and  finally 


30  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

repay  the  capital,  for  which  it  has  to  tax  itself 
just  the  same.  And  going  a  step  further,  we  may 
consider  the  time  not  far  distant  when  systems 
of  taxation  may  be  devised  that  will  enable  com- 
munities to  tax  themselves,  or  rather  their  pro- 
ductive labor,  so  as  to  provide  the  necessary  capi- 
tal for  the  maintenance  and  improvement  of 
means  of  production  and  distribution,  without  the 
interposition  of  private  capitalists  requiring  the 
payment  of  interest.  In  that  day  the  assertion 
that  all  capital  is  the  result  of  the  individual 
owner's  abstinence  and  saving,  will  no  longer 
pass  as  an  axiomatic  truth  of  economics,  but 
will  take  its  place  as  ancient  history.  And  even 
more  emphatically  will  this  be  the  case  with  the 
whole  wages  fund  doctrine,  with  the  statement 
that  it  is  the  capitalist  who  furnishes  employ- 
ment for  labor,  and  that  this  employment  is 
limited  by  the  amount  of  available  capital. 

It  is  true,  that  up  to  the  present,  large  enter- 
prises could  not  have  been  undertaken  but  for  the 
subsistence  fund,  or  wages  fund,  furnished  by 
so-called  capitalists,  unless  the  state  or  city  as 
such  would  undertake  these  enterprises;  and  for 
that  the  state  has  not  as  yet  developed  sufficient 
fitness,  as  a  general  thing. 

In  the  gathering,  or  raising  of,  this  capital, 
and  thus  making  it  available,  the  private  capitalist 
has  performed  a  real  and  an  important  sociolog- 
ical function,  though  he  may  not  in  any  appre- 
ciable measure  have  practiced  abstinence  himself, 
but  rather  done  his  saving  by  proxy ;  imposed  the 
abstinence,  as  it  were,  upon  the  lower  orders. 
Yet,  he  was  instrumental  in  having  the  saving 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  31 

done,  and  so  fulfilled  a  function  in  society,  and 
in  a  sense  did,  by  virtue  of  this  assembled  capi- 
tal, furnish  a  certain  amount  of  employment  for 
labor.  But  it  is  utterly  false  therefore  to  con- 
clude that  the  capitalist  in  this  way  furnishes  all 
employment,  and  pays  all  the  wages  of  labor,  as 
conventional  economists  say,  and  perhaps  be- 
lieve, or  at  least  teach. 

It  is  the  ultimate  consumer  who  furnishes  all 
employment  and  who,  generally  speaking,  pays 
all  wages;  he  it  is  who,  in  the  final  analysis, 
pays  even  the  wages  that  were  first  advanced  from 
a  wages  fund  used  in  establishing  new  enterprises, 
as  well  as  the  wages  of  much  of  the  unproduc- 
tive labor  performed  by  or  for  the  so-called  eco- 
nomic parasites.  When  once  a  manufacturing 
establishment,  a  railroad,  street  car  enterprise,  or 
what  not,  has  become  a  going  concern,  its  income 
is  derived  from  the  traveler,  shipper,  or  other 
ultimate  consumer,  and  flows  in  a  constant  stream 
into  the  coflfers  of  such  a  concern ;  and  from  this 
all  wages,  salaries,  and  expenses  are  paid,  as 
well  as  repayment  made  of  much  of  the  original 
investment,  if  not  all.  Precisely  so,  and  much 
more  fully  so,  is  this  the  case  with  mere  buying 
and  selling  enterprises.  It  is  the  ultimate  con- 
sumer who  sustains  them  all.  And  who  is  the 
ultimate  consumer?  Why,  every  man,  woman, 
and  child  in  this  world  is  of  necessity  a  consumer ; 
a  consumer  all  his  days,  and  in  a  way  a  consumer 
even  before  birth  and  also  after  death,  in  that 
he  occasions  employment  for  coffin  maker  and 
for  grave  digger.  In  a  small  measure  is  it  true 
that  capital,  the  accumulated  savings,  furnishes 


32  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

employment,  and  in  a  large  measure  is  it  false; 
and  upon  this  false  assumption,  serving  as  a 
fundamental  axiom,  an  essentially  false  political 
economy  has  been  built  up. 

But  some  economists  may  say:  the  mere  fact 
that  an  individual  desires  to  consume  things  does 
not  make  him  a  consumer  in  the  economic  meaning 
of  that  word;  he  must  be  an  effective  consumer,  a 
purchaser;  if  he  has  no  purchasing  power,  he  has 
no  standing  in  economic  reasoning.  Precisely 
so,  and  why  may  he  be  without  purchasing 
power?  Just  because  the  false  economic  condi- 
tions that  rule  in  the  world  today  have  stripped 
him  of  a  large  part  of  that  purchasing  power, 
by  often  denying  him  employment,  and  by  deny- 
ing him  just  remuneration  when  he  is  employed. 
And  this  denial  of  employment  is  brought  about 
by  permitting  land  and  other  natural  resources 
to  be  monopolized  and  controlled  as  private  prop- 
erty, in  consequence  of  which  employment  itself 
has  largely  become  a  monopoly,  controlled  by 
the  possessing  classes;  and  employment  is  man- 
aged as  the  interests  of  these  owners  and  con- 
trollers dictate,  regardless  of  how  illy  the 
disinherited  masses  may  fare.  And  this  is  the 
great  sin  of  orthodox  political  economy;  instead 
of  casting  about  for  a  remedy  for  these  evils,  it 
is  content  to  justify  them  in  the  name  of  science, 
as  beins:  natural  and  unavoidable. 

But  it  is  not  intended  in  this  brief  treatise  to 
examine  at  length  the  various  fundamental  errors, 
which  in  the  present  writer's  opinion  largely  in- 
validate the  whole  so-called  science  of  economics, 
as  conventionally  taught  in  the  schools;  such  a 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  33 

work  lies  beyond  his  ambition.  My  purpose  is 
to  examine  the  current  value  theories,  to  demon- 
strate their  inadequacy  and  their  failure  to  serve 
as  a  basis  for  economic  thought ;  and  then  to  pre- 
sent for  the  consideration  of  competent  critics, 
what  I  conceive  to  be  a  true  and  workable  theory 
of  value.  A  theory,  which,  if  accepted,  will  not 
only  revolutionize  economic  thought,  but  will  also 
settle  most  of  the  difficulties  and  controversial 
differences  that  now  beset  the  science ;  and  which 
at  the  same  time  offers  a  solution  for  many  of 
the  political  and  economic  problems  that  vex  our 
ag^e,  that  give  occasion  for  industrial  strife  in 
every  civilized  country,  and  that  even  cause  na- 
tions to  engasfe  in  war. 

The  all-pervading  question  of  mine  and  thine 
reduces  in  economics  to  a  question  of  value,  a 
question  of  exchange  ratio — at  what  ratio  shall 
my  labor  exchange  for  thine?  Until  this  ques- 
tion is  answered  satisfactorily,  fairly,  ;and  as 
justly  as  limited  human  wisdom  may  be  able 
to  answer,  until  then,  there  is  no  science  of  po- 
litical economy  worthy  the  name  of  science.  To 
answer  that  question  is  the  task  the  writer  of 
this  treatise  has  attempted.  And  to  pave  the 
way  for  such  answer,  it  has  been  necessary  brief- 
ly to  call  attention,  not  only  to  the  dissensions 
in  the  ranks  of  economists,  but  also  to  what  T 
consider  fundamental  errors.  As  stated  above, 
it  lies  beyond  the  scope  of  this  little  book  to 
review  the  entire  field  of  economics;  and  there 
are  certain  departments  that  I  shall  not  discuss  at 
all.  A  slight  reference  to  some  of  these  may  be 
made,  merelv  in  an  incidental  wav;  they  are  not 


34  SCOPE  AND  FUNCTION  OF  ECONOMICS. 

essential  to  the  subject  of  the  present  treatise. 
Under  this  head  comes  the  subject  of  money  as 
a  medium  of  exchange.  The  subject  of  this 
treatise  is  the  origin,  nature,  and  essence  of 
value,  and  its  quantitative  determination.  The 
media  of  exchange,  which  convenience  may  dic- 
tate, as  well  as  the  conventional  standards,  money 
standards,  in  which  everyday  life  expresses  value, 
are  matters  for  later  consideration;  and  with 
these  I  do  not  propose  to  deal,  nor  with  the  ques- 
tion of  foreign  trade  and  liquidation.  These  are 
subsequent  details;  the  primary  questions  are: 
what  is  value,  how  does  it  arise,  what  creates  it, 
causes  it,  produces  it,  constitutes  it,  and  how  is 
it  determined  quantitatively.  This  will  be  dis- 
cussed at  length  in  Part  II. 

It  remains  here  but  to  remark  that  the  pro- 
posed value  theory  is  independent  of  socialistic 
forms  of  society;  if  true,  it  is  true  under  private 
ownership  of  capital  as  under  collective  owner- 
ship; true  along  with  the  existence  of  private 
property  in  land  or  without;  true  irrespective  of 
interest,  and  rent.  The  writer  shall  make  no 
attempt  to  deny  his  socialistic  predilection,  nor 
deny  that  socialist  sentiment  should  incline  a 
reader  to  accept  the  author's  value  theory  as  a 
true  one  and  a  salutary  one,  while  individualistic 
conservatism  will  of  necessity  strongly  prejudice 
against  it.  But  whether  the  world  is  ripe  for  a 
greater  measure  of  collectivism,  or  whether  it 
shall  be  found  that  the  human  race  is  not  ready 
for  such,  and  must  yet  a  while  endure  under 
the  regime  of  competitive  individualism,  this 
theory  of  value  should  in  either  case  appeal  to 


SCOPE  AND  FUNCTION  OF  ECONOMICS.  35 

the  growing  sense  of  democracy  manifest  in  all 
the  world ;  to  the  sense  of  fairness  and  the  desire 
for  truth  and  for  social  justice,  which  is  the  hope 
and  encouragement  of  all  well-meaning  and  clear- 
thinking  men. 

Considering  that  all  the  foregoing  is  introduc- 
tory to  a  promised  theory  of  value,  and  that  a 
large  part  of  the  next  chapter  will  be  of  an 
introductory  nature,  the  reader  may  become 
wearied  of  all  this  introductory  matter  and  impa- 
tiently ask  for  a  statement  of  this  theory.  I 
think  it  advisable  therefore  to  close  this  chap- 
ter with  the  following  proposition,  which  con- 
cretely embodies  my  value  theory: 

Equal  pay,  hour  for  hour,  for  all  kinds  of  use- 
ful work  of  standard  efficiency,  male  or  female. 

This  is  a  demand  which  I  formulated  a  few 
years  ago,  and  which  I  have  never  seen  as  part 
of  any  radical  platform.  Its  absence  from  these 
is  an  indication  that  the  makers  of  these  plat- 
forms had  no  adequate  value  concepts  to  give 
expression  to.  They  have  much  to  say  about  giv- 
ing the  laborer  a  just  reward,  some  say  the  full 
value  of  his  toil,  or  a  full  return  for  the  value 
he  creates;  but  they  give  no  hint  as  to  how  that 
value  is  to  be  determined,  otherwise  than  by  the 
haphazard  and  unjust  methods  of  supply  and 
demand  that  are  accepted  or  assumed  in  the  eco- 
nomics of  today ;  methods  that  can  neither  estab- 
lish industrial  justice,  nor  bring  industrial  peace. 
To  supply  this  need,  to  give  such  answer,  is  the 
purpose  of  this  little  book. 


PART  II. 

VALUE. 

Chapter  II. 

General    Value    Notions.      Anderson    and 
Davenport  on  Value. 

What  is  value?  How  is  value  determined? 
These  are  questions  which  for  many  years  have 
occupied  my  attention,  not  only  occupied,  but 
greatly  puzzled  me;  since  no  thinking  man  or 
woman  can  fail  to  see  that  the  value-estimates 
which  rule  in  human  affairs  are,  generally  speak- 
ing, strangely  absurd,  as  well  as  grossly  unjust; 
especially  in  regard  to  valuation  of  different 
kinds  of  human  labor,  and  compensation  allowed 
for  the  same.  That  the  severest  and  most  bur- 
densome toil  has  had  put  upon  it  the  lowest  value 
estimate,  and  consequently  has  received  the 
meagrest  compensation,  while  merely  orna- 
mental, or  doubtful,  and  even  harmful  activities, 
have  been  amply  rewarded,  this  is  a  commonplace, 
repeated,  over  and  over  again,  both  in  economic 
and  in  general  literature,  not  to  speak  of  reform 
literature.  Realizing  the  unfairness  and  injustice 
of  the  value  estimates  that  the  world  in  general 
has  been  in  the  habit  of  accepting,  and  has  con- 
sented to  live  under,  I  gave  that  subject  much 
thought,  and  I  arrived  at  several  conclusions. 
First,  that  the  value  estimate  put  upon  things 
is,  in  the  final  analysis,  a  value  estimate  put  upon 

36 


ANDERSON  AND  DAVENPORT  ON  VALUE.    i7 

labor.  For  inasmuch  as  things,  ^commodities, 
are  labor  products,  it  follows  that  the  value  esti- 
mate put  upon  various  commodities  really  is  a 
value  estimate  put  upon  various  kinds  of  labor 
that  produced  these  commodities.  Secondly,  I 
arrived  at  the  conclusion  that  justice  and  fairness 
demands  that  that  labor  which  is  the  most  severe 
and  burdensome,  which,  in  the  language  of  mod- 
ern economists,  involves  the  greatest  amount  of 
labor  pain,  should  be  the  more  highly  compen- 
sated, if  any  difference  of  compensation  is  to  be 
allowed. 

Why  is  it,  for  instance,  that  upon  a  bushel  of 
wheat,  society,  or  the  "world,"  puts  a  value  esti- 
mate of  50  cents,  75  cents,  or  one  dollar  perhaps, 
(I  am  speaking  of  prewar  times)  an  estimate 
which,  according  to  statements  made  at  recent 
farmers'  conventions,  puts  upon  the  farmer's 
work  a  labor  value  of  about  one  dollar  a  day. 
And  this  is  a  labor  of  the  utmost  importance,  a 
labor  absolutely  essential  to  human  existence;  but 
the  work  of  some  windy  go-between,  whose  activ- 
ity results  mainly  in  diverting  business  from  Mr. 
A  to  Mr.  B,  is  four  and  five  times  as  highly  com- 
pensated. The  coal  miner  in  this  country  has  until 
recently  been  one  of  the  poorest  paid  laborers, 
notwithstanding  the  fact  that  the  product  of  his 
labor  constitutes  one  of  the  prime  necessaries  of 
life,  and  that  his  work  is  perhaps  the  most  bur- 
densome known  to  man  and  the  most  dangerous 
to  life;  while  many  other  occupations,  much 
lighter  and  less  disagreeable,  have  been  more 
highlv  compensated,  partly  because  of  custom, 
and  partly  because  backed  by  a  powerful  organi- 


38  GENERAL  VALUE  NOTIONS. 

zation.     Why  can  this  be?     What  principle  or 
power  operates  to  estabhsh  such  unfair  valua- 
tions?    I  concluded  there  was  no  principle  in- 
volved at  all;  at  best  only  a  convention  or  a 
traditional  custom,  masquerading  as  principle,  or 
as  an  economic  law,  designated  by  ordinary  po- 
litical economy  as  the  law  of  supply  and  demand. 
I  further  arrived  at  the  conclusion  that  industrial 
disputes,  often  resulting  in  riot  and  bloodshed, 
disputes  that  nominally  center  about  wages  and 
length  of  workday,  really  are  disputes  about  the 
value  estimate  to  be  put  upon  an  hour's  labor  in 
the  trade  or  occupation  involved  in  such  strikes. 
Whence  it  follows :  that  if  a  value  estimate  could 
be  established  that  would  appeal  to  the  sense  of 
justice  and  fairness  of  all  men,  one  that  would 
satisfy  and  be  generally  accepted  by  the  civilized 
world,  then  there  would  be  an  end  to  industrial 
strife  within  the  various  countries;  and  the  for- 
eign commercial  policies  of  these  countries  would 
be  so  influenced  as  to  remove  largely,  if  not  whol- 
ly, the  incentive  to  war  between  nations.  Further- 
more, I  became  convinced  that  a  rational  theory 
of  value,  based  on  sane  and  true  value  estimates 
of  all  labor  and  labor-products,  and  a  political 
economy  built  upon  such  a  theory  of  value,  and 
expressed  in  the  national  life,  in  the  economic 
institutions,  and  in  the  industrial  activities  of  a 
country,  would  efifectually  prevent  the  industrial 
deadlocks,  known  as  panics  or  business  depres- 
sions, which  periodically  afflict  present-day  society 
with  their  attendant  aggravation  of  unemploy- 
ment  and  consequent  misery.      For   I   contend, 
that  an  industrial  policy  and  practice  founded 


ANDERSON  AND  DAVENPORT  ON  VALUE.    39 

on  a  true  evaluation  of  all  the  products  of  labor 
and  of  the  labor  itself  would  establish  a  commen- 
surate flow  of  purchasing  power  back  to  the  origi- 
nal producers,  so  as  to  make  relative  overproduc- 
tion and  consequent  stagnation  and  unemploy- 
ment impossible.  Believing  this,  I  felt  that  such 
a  value  theory,  properly  formulated  and  eluci- 
dated, constitutes  a  message  to  the  world,  which 
duty  bids  the  possessor  thereof  to  deliver,  though 
doing  so  may  involve  personal  sacrifice  and  loss. 
That  feeling  of  duty  has  for  the  last  few  years 
pressed  upon  me  with  increasing  force.  Ordi- 
nary sense  and  prudence,  however,  bade  me  as- 
certain what  other  men  have  thought  and  said 
on  this  subject  of  value,  and  especially  to  ascer- 
tain what  accredited  economists  had  to  say  con- 
cerning value.  I  was  not  aware  of  the  vagueness 
of  current  value  theories,  nor  of  the  controversies 
and  conflicting  opinions  concerning  value,  that 
obtain  among  economists.  It  is  true,  I  had  in 
my  school  days  taken  a  light  course  in  political 
economy,  the  textbook  being  Walker's  Briefer 
Course.  I  had  also  many  years  ago  read  another 
book  on  political  economy,  but  neither  of  these 
books  had  at  the  time  made  any  distinct  impres- 
sion on  my  mind  in  regard  to  value  theories. 
I  therefore  had  recourse  to  the  public  library, 
and  the  first  volume  I  took  up,  attracted  by  its 
title,  was  "Social  Value,"  a  Hart,  SchafTner  & 
Marx  prize  essay  by  B.  M.  Anderson,  Ph.  D., 
Instructor  in  Political  Economy  at  Columbia  Uni- 
versity. I  was  somewhat  astonished  to  read  in 
the  author's  prefacing  note  the  following  state- 
ment :    'The  problem  of  value  forced  itself  upon 


40  GENERAL  VALUE  NOTIONS. 

me  in  the  course  of  my  teaching.  My  students 
seemed  to  understand  the  treatment  of  value  in 
the  textbooks  used  quite  clearly,  but  I  could  never 
convince  myself  that  I  understood  it,  and  the  con- 
viction grew  upon  me  that  the  value  problem 
really  remained  unsolved.     Hence  this  book." 

Professor  Anderson's  book  is  of  rather  recent 
date,  May,  1911.  It  covers  nearly  two  hundred 
pages,  and  evidences  on  the  part  of  the  author 
wide  economic  reading  and  study.  He  reviews 
the  whole  field  of  recent  economic  writing,  in  a 
persistent  search  for  a  true  and  consistent  theory 
of  value ;  and  he  is  much  impressed  by  and  gives 
credit  to  what  he  calls  the  Austrian  school  of 
economists  and  their  subjective  value  imputa- 
tions, including  the  marginal  utility  and  value 
idea.  He  is  likewise  appreciative  of  more  re- 
cent interpreters  of  these  ideas  and  their  investi- 
gations along  this  line  of  inquiry.  But  he  re- 
jects the  results  of  their  efforts  as  unsatisfac- 
tory and  inconclusive,  and  in  the  end,  as  it  seems 
to  me,  he  offers  nothing  substantial  and  tangible 
himself.  So  vague  and  abstruse  is  the  presenta- 
tion of  his  own  value  theory  that  I  had  much 
difficulty  in  finding  it,  but  finally  concluded  that 
Professor  Anderson's  value  theory  is  wrapped 
up  in  a  page  and  a  half  of  technical  disquisition 
(pp.  185-86)  to  this  effect,  that  the  value  theory 
must  be  derived  from,  and  presupposes,  a  price 
theory.  This  is  stated  more  briefly  on  p.  192: 
"The  theory  of  value,  as  I  conceive  it,  is,  then, 
not  a  substitute  for  detailed  price-analysis,  but 
rather  a  presupposition  of  it.  The  theory  of  value 
is  to  interpret,  validate,   and  guide  the  theory 


ANDERSON  AND  DAVENPORT  ON  VALUE.    41 

of  prices."  Here  it  seems  he  makes  the  value- 
theory  a  presupposition,  while  on  page  184  price- 
concept  is  the  presupposition:  "The  conception 
of  abstract  units  of  value  therefore  is  an  abstrac- 
tion from  the  price  conception  and  presupposes  it." 

Professor  Anderson  does  a  great  deal  of  theo- 
rizing on  the  subject  of  value,  but  I  cannot  see 
that  he  submits  anything  definite  and  clean  cut 
that  I  could  call  a  theory  of  value.  Whatever 
he  may  have  had  in  mind,  I  confess  I  got  from 
his  book  no  light  on  the  value  problem.  All  it 
did  for  me  was  to  certify  to  the  great  diversity 
of  opinion,  the  vast  controversial  literature,  and 
the  general  vagueness  and  confusion  that  obtain 
in  the  realm  of  economics,  especially  in  regard 
to  the  value  problem.  This,  together  with  the 
confession  that  the  value  problem  to  date  re- 
mains unsolved,  is  what  I  got  from  Professor 
Anderson's  book. 

Four  economists  are  reviewed  at  considerable 
length  in  Professor  Anderson's  book:  Clark, 
Seligman,  Wieser,  and  Davenport.  The  latter  is 
the  author  of  several  books  on  economics,  one 
of  which,  "Value  and  Distribution,"  a  volume 
of  575  pages,  is  a  critical  study  dealing  with 
the  value  problem,  and  this  book  is  also  of  com- 
paratively recent  date,  1908.  A  brief  note  of 
dedication  to  J.  L.  Laughlin,  certifies  once  more 
to  the  controversies  and  to  the  divergence  of 
opinions  held  by  economists  in  regard  to  the  prob- 
lem of  value,  by  the  following  statement:  "In  a 
field  so  controversial,  as  this  of  value-doctrine, 
identity  of  interest  is  no  pledge  of  agreement; 
much  therefore  in  the  following  pages  must  fail 


42  GENERAL  VALUE  NOTIONS. 

to  command  your  acquiescence."  Professor 
Davenport  states  in  the  preface  that  he  has 
emphasized  opportunity  cost  as  an  element  of 
value,  and  he  says  on  page  vii :  "-Political  econ- 
omy began  its  value  theories  with  cost  of  pro- 
duction from  the  entrepreneur  point  of  view,  but 
wandered  far  afield  in  search  of  labor  determi- 
nants of  value,  and  labor  standards  of  value  meas- 
urement." And  on  pages  viii  and  ix  he  says: 
"Little  can  be  ofifered  that  is  new  on  utility  and 
its  modern  refinements;  but  the  relativity  of  util- 
ity on  the  demand  side,  and  cost  on  the  supply 
side  of  the  market  equation,  has  seemed  in  spe- 
cial need  of  emphasis."  .  .  .  "The  necessary 
thing  has  in  the  main  seemed  to  be  to  rid  the 
science  of  doctrines  that  do  not  belong  to  it,  as 
labor  time,  labor  pain,  utility  and  marginal  util- 
ity determinants  of,  or  measures  of,  value." 

Well,  if  this  author  has  nothing  new  to  offer, 
and  if  furthermore  he  proposes  to  discard  labor 
time,  labor  pain,  and  utility  as  value  determinants, 
then  there  is  nothing  in  his  575  pages  that  can 
be  of  any  constructive  help  to  the  present  writer ; 
for  utility,  labor  pain,  and  labor  time  are  the 
very  things  that  I  contend  are  the  real  factors 
which  determine  and  constitute  economic  value, 
exchange  value  as  well  as  use  value. 

However,  in  another  way  Professor  Daven- 
port's book  proved  interesting  as  well  as  inform- 
ing to  me,  inasmuch  as  it  bears  witness  to  the 
controversial  condition  of  economic  science,  and 
to  the  fact  of  an  unsolved  value  problem.  Very 
interesting  to  me  is  his  critical  examination  of 
the  value  theories  of  many  prominent  economists. 


ANDERSON  AND  DAVENPORT  ON  VALUE.    43 

finding  them  inadequate  and  unsatisfactory,  and 
invalidated  by  circle-reasoning.  He  begins  his 
discussion  with  these  statements:  "The  scien- 
tific development  of  economic  theory  began  with 
the  attempt  to  solve  the  value  problem.  Almost 
all  the  early  doctrine  was  cost  doctrine  in  some 
of  its  varying  aspects.  The  earlier  writers  inter- 
preted cost  in  terms  of  labor,  but  in  the  detailed 
working  out  of  the  value  problem  and  its  further 
development,  the  notion  of  cost  came  to  be  pre- 
sented in  all  its  dififerent  and  conflicting  senses." 
Then  he  cites  Adam  Smith  as  stating  that  the 
labor  of  a  nation  is  the  fund  that  originally  sup- 
plies it  with  the  necessaries  and  conveniences  of 
life.  This  Davenport  terms  the  labor  purchase 
doctrine  of  cost  (p.  8),  and  elucidates  by  further 
quotation  from  Chap.  V,  Wealth  of  Nations: 
Labor  was  the  first  price,  the  original  purchase 
money  paid  for  all  things ;  by  labor  all  the  wealth 
of  the  world  was  originally  purchased,  and  the 
value  thereof  is  equal  to  the  quantity  of  labor  it 
again  can  purchase  or  command.  To  this  Daven- 
port objects  that  it  holds  only  under  a  particular 
situation;  and  he  argues  at  length  that  environ- 
mental opportunity  enters  as  a  factor  into  the 
productiveness  of  labor,  and  therefore  becomes  a 
factor  in  the  value  of  the  product.  Quoting 
further  from  the  same  chapter  of  Adam  Smith's 
Wealth  of  Nations  to  the  efifect  that  equal  volumes 
of  labor  must  be  of  equal  value  to  the  laborer, 
because  he  must  lay  down  the  same  portion  of  his 
ease,  his  liberty  and  his  happiness,  Davenport 
sees  in  this  a  distinct  enunciation  of  labor  pain 
cost   as  the  determinant   of   the   real  value  of 


44  GENERAL  VALUE  NOTIONS. 

labor.  And  again  quoting  Smith :  "Labor  there- 
fore is  the  real  measure  of  the  exchange  value  of 
all  commodities.  The  real  price  of  everything, 
what  everything  really  costs  the  man  who  wants 
to  acquire  it  is  the  toil  and  trouble  of  acquiring 
it;  what  everything  really  is  worth  to  the  man 
who  has  acquired  it  is  the  toil  and  trouble  it  can 
save  himself  and  which  he  can  impose  upon 
others."  And  on  this  Davenport  comments,  page 
13:  "This  means  that  the  real  price  or  real 
value  is  always  the  labor  of  attainment;  but 
whether  this  labor  is  conceived  as  in  itself  a 
value  or  a  burden  is  not  so  clear." 

Precisely  here  economists  are  groping  in  the 
dark,  when  they  assume  that  labor  cannot  be 
both  burden  and  value  or  value  essence,  value 
potential,  but  that  these  two  attributes  mutually 
exclude  each  other.  That  labor  is  a  burden  is 
quite  self-evident  and  calls  for  no  argument; 
that  it  also  is  the  producer  of  value,  the  "value 
producing  burden,"  is  equally  self-evident,  and 
is  universally  admitted,  and  therefore  a  "value" 
may  be  imputed  to  labor,  a  value  estimate  put 
upon  it.  Both  these  attributes,  value  and  burden- 
someness,  belong  to  labor,  just  as  clearly  as  the 
two  attributes  of  hardness  and  weight  may  belong 
to  some  one  substance;  and  this  should  present 
no  difficulty  to  human  understanding.  The  dif- 
ficulty of  understanding  this  in  the  past,  I  think, 
roots  in  man's  historical  environment;  he  has  in 
all  past  time  seen  how  the  possession  of  values 
has  freed  the  possessor  thereof  from  the  burden 
of  labor,  hence  value  and  labor  burden  became 
antithetical  conceptions  of  the  general  mind.     It 


ANDERSON  AND  DAVENPORT  ON  VALUE.    45 

was  seen  that  when  a  man  held  possession  of 
much  value,  of  much  exchange  value,  of  money 
if  you  please,  or  other  exchangeable  commodities, 
he  could  thereby  command  the  labor  of  those  who 
had  little  or  none,  and  thus  shift  the  labor  burden 
of  life  upon  those  others.  Hence  in  the  minds 
of  men  value  and  labor  burden  became  opposites ; 
and  to  this  erroneous  conception  is  largely  due  the 
confusion  in  economic  thought  of  the  past,  as  well 
as  of  our  own  day,  a  confusion  which  will  disap- 
pear with  the  acceptance  of  a  rational  theory  of 
value. 

I  defer  a  more  detailed  consideration  of  labor 
as  burden  and  value  to  a  later  page  and  recur  to 
Davenport,  who  further  quotes  Adam  Smith  to 
this  effect:  that  though  labor  is  a  real  measure 
of  exchange  value  of  commodities,  it  is  not  labor 
by  which  the  value  of  commodities  is  commonly 
estimated.  Popular  thought  does  not  have  re- 
course to  a  labor  measure  of  value,  because  peo- 
ple estimate  concrete  commodities  rather  than 
abstract  labor.  And  here  Davenport  remarks, 
page  14:  "All  of  this  means  that  it  is  possible  to 
reduce  labor  to  a  homogeneous  fund  [quantity], 
but  of  what?  Time?  Evidently  not.  Of  pain? 
This  also  will  not  serve.  Of  value?  But  if 
value  depends  upon  and  is  derived  from  the  prod- 
uct, then  it  is  value  that  is  called  upon  to  explain 
value,  a  view  which  would  conceive  labor  as  re- 
ceiving rather  than  determining  value." 

And  again,  on  page  18:  "It  may  not  be  clear 
why  the  common  denominator  for  value  based 
on  labor  was  considered  so  important,  but  the 
labor  measure  of  value  seems  to  have  been  the 


46  GENERAL  VALUE  NOTIONS. 

only  one  thought  possible  at  the  time.  And  it 
may  be  questioned  whether  later  thought,  in  sub- 
stituting utility  for  labor  cost  as  a  value  determi- 
nant, has  been  able  to  do  more  upon  the  utility 
side  than  repeat  the  error  on  the  cost  side, 
namely,  seeking  to  compare  things  which  in  their 
fundamental  nature  offer  no  basis  for  compari- 
son. With  value  conceived  as  a  mere  ratio  of 
exchange,  the  statement  of  that  ratio  can  have 
no  meaning  for  the  purpose  in  hand,  unless  some 
common  denominator  has  been  established." 

In  passing  I  want  to  say  that  both  the  labor 
cost  doctrine  and  the  utility  doctrine  of  value  are 
true,  but  taking  either  by  itself  and  excluding 
the  other  they  become  misleading  half-truths. 
Labor  cost  and  utility  must  be  combined  to  con- 
stitute value,  and  the  attempt  of  various  schools 
to  emphasize  one  to  the  exclusion  of  the  other, 
has  led  to  confusion  of  thought,  and  to  endless 
controversy.  I  am  in  nowise  puzzled  that  the 
labor  measure  of  value  seemed  so  important,  and 
the  real  one,  to  Adam  Smith  and  the  early  econ- 
omists. Their  postulate,  that  labor  is  the  pro- 
ducer of  all  wealth  and  of  exchangeable  value, 
is  a  truth  so  self-evident  that  it  was  deemed  all- 
sufficient  to  explain  value.  Later  emphasis  was 
placed  upon  the  fact  that  labor  might  be  mis- 
directed, or  wasted,  and  therefore  fruitless  as  to 
any  resultant  value;  hence  the  equally  essential 
condition  of  value,  utility,  was  found  to  be  as 
self-evidently  necessary  to  a  complete  value  con- 
cept as  labor.  This  I  shall  treat  of  more  at 
length  further  on,  where  I  mean  to  demonstrate 
that  labor  is  reducible  to  a  universal  homoge- 


ANDERSON  AND  DAVENPORT  ON  VALUE.    47 

neous  essence — labor  pain,  and  to  a  homogeneous 
quantity — labor  time;  a  homogeneity  which, 
though  not  absolute,  is  sufficient  for  all  practical 
purposes  of  human  life  and  association.  If  this 
can  be  shown  to  be  true,  then  it  removes  Pro- 
fessor Davenport's  stumbling  block,  presented 
in  the  following  statement,  page  21:  "Adam 
Smith's  reasoning  is  reducible  to  a  formula  in 
porportion — labor  :  labor  ::  value  :  value  [labor 
is  to  labor  as  value  is  to  value]  *  which  is  per- 
fectly correct  upon  the  assumption  of  perfect 
homogeneity  of  labor,  but  this  is  admitted  by 
Smith  to  be  wanting,  where  he  says:  'If  one 
species  of  labor  should  be  more  severe  than  the 
other,  then  some  allowance  will  naturally  be  made 
for  the  greater  hardship ;  and  the  produce  of  one 
hour's  labor  may  exchange  for  two  hours  in  the 
other.'  All  of  which  is  correct  as  a  matter  of 
everyday  fact,  but  with  it  the  proportion  doctrine 
falls,  and  with  it  time  cost."  Let  us  note  in  pass- 
ing that  higher  compensation  for  severer  labor  is 
here  spoken  of  as  an  everyday  fact.  The  reverse 
of  this  is  more  generally  asserted;  of  this  more 
will  be  said  later  on. 

Professor  Davenport  also  speaks  of  pain  cost 
and  abstinence  cost  being  both  asserted  and  again 
abandoned  by  Smith  as  value  determinants;  and 
on  page  30  he  refers  to  Ricardo  as  follows :  "Very 
confusing  in  Ricardo's  discussion  is  the  fact  that 


*  Since  the  author  expects  this  book  to  be  read  by  many 
who  are  not  familiar  with  mathematical  formulae,  I  shall 
try  to  make  clear  that  this  means  that  for  instance  8  hours 
labor  is  to  4  hours  labor  as  2  quantities  of  value  are  to  1 
quantity  of  value;  that  is,  both  these  ratios,  8  to  4  and  2  to  1. 
are  alike,  both  being  as  2  to  1. 


48  GENERAL  VALUE  NOTIONS. 

he  uses  two  meanings  for  the  term  value,  one 
meaning  real  value  in  the  sense  of  concreted 
labor — concreted  pain  cost,  the  other  meaning 
power  in  exchange.  And  that  Ricardo  also  has 
two  meanings  for  'value  of  labor' — one  meaning 
mere  market  value  of  labor  and  the  other  ratio 
of  labor  to  profit,  Ricardo  never  accepts  the  doc- 
trine that  the  value  of  labor  depends  upon  the 
value  of  the  product,  but  consistently  holds  the 
contrary,  that  the  value  of  a  commodity  depends 
upon  the  labor  put  into  it,  [that  is]  upon  the  cost 
of  production."  And  on  page  34:  "With  all  the 
Ricardoan  group,  as  with  Adam  Smith,  the  de- 
sideratum in  the  exchange  value  problem  was  to 
get  a  measure.  If  land,  the  Physiocrat's  basis, 
was  discarded  what  else  then  could  serve  but 
labor?  Utility  could  not  serve  then  [at  that 
time],  whether  we  shall  say  that  the  required  basis 
has  now  been  found  in  the  marginal  notion  or 
not.  Ratios  would  not  serve  the  purpose,  ratios 
of  what?    Determined  by  what?" 

It  might  be  interesting  to  quote  also  Daven- 
port's reference  to  Mill,  Senior,  Cairnes,  Say, 
Boehm-Bawerk,  and  Clark,  and  their  proposals, 
in  all  of  which  he  finds  no  satisfactory  solution  of 
the  value  problem.  But  I  must  desist;  for  this 
is  not  to  be  a  review  of  Prof.  Davenport's  book, 
and  the  reader  may  be  getting  impatient  to  hear 
what  the  present  writer  has  to  ofifer  as  a  solution 
of  that  problem.  I  thought  it  necessary  to  cite 
Anderson  and  Davenport  as  evidence  of  the  con- 
troversial state  of  economic  science,  and  of  an  un- 
solved value  problem,  which  neither  of  these  men 
make  claim  of  having  solved.    In  support  of  which 


ANDERSON  AND  DAVENPORT  ON  VALUE.    49 

I  quote  a  few  additional  passages,  condensed  from 
"Value  and  Distribution" : 

"No  writer  of  the  cost  school  can  fairly  be 
charged  with  overlooking  the  fact  of  utility  as  a 
fundamental  condition  to  the  existence  of  value. 
Utility  and  the  market  demand  are  taken  for 
granted,  but  the  fixation  of  value,  always  inside 
the  limits  of  utility,  must  be  found  on  the  cost 
side.  True,  there  are  goods  of  a  distinctly  scar- 
city sort,  but  these  were  left  out  of  the  reckoning 
as  exceptional  in  character  and  unimportant  in 
quantity;  the  investigation  confined  itself  to  re- 
producible goods"  (p.  44). 

This  is  a  significant  statement  with  which  I 
have  no  quarrel.  It  is  good  as  far  as  it  goes,  and 
I  may  have  occasion  to  refer  to  it  later. 

On  page  334  I  find  another  significant  state- 
ment :  "It  is  also  true  that  competition  is  placing 
new  values  on  cost  goods,  and  brings  about  a  new 
proportioning  of  values  with  costs  or  costs  with 
values,  and  in  turn  upon  these  new  costs,  new 
computations  and  producings,  and  so  on  indefi- 
nitely in  a  circle,  the  result  of  each  situation  be- 
coming in  turn  cause  for  the  next  term  in  the 
series.  The  ultimate  causation  must  then  be 
sought  elsewhere;  in  the  sense  of  finality  neither 
cost  nor  value  is  cause,  and  any  attempt  to  fix 
upon  either  as  ultimate,  or  even  as  logically  prior, 
must  inevitably  lead  to  circuity  of  reasoning  or 
to  question  begging."  Also  page  346:  "The 
ultimate  test  must  come  with  the  newer  treatment 
of  costs;  in  the  conviction  of  the  present  writer 
[Davenport]  the  Austrian  doctrine  [marginal 
utility]    does  not  make  a  convincing  showing. 


so  GENERAL  VALUE  NOTIONS. 

Value  as  cost  may  explain  value  as  product,  but 
how  are  we  to  explain  the  first  value?" 

Here  is  a  plain  confession  that  the  value  prob- 
lem so  far  has  been  an  unsolvable  riddle  to  econ- 
omists, and  Davenport  hopes  for  a  "newer 
treatment  of  costs"  to  help  solve  this  riddle. 
Economists  seem  to  be  as  lost  and  as  helpless 
without  a  value  measure  as  were  merchants  in 
handling  goods  bought  and  sold  by  length  meas- 
ure before  modern  governments  established  legal 
standards  of  length,  which  gave  them  yardsticks 
of  uniform  and  definite  length. 

A  quotation  from  Professor  Davenport's  con- 
cluding summary  is  in  point ;  page  570 :  "Neither 
in  utility  on  the  demand  side,  nor  in  pain  cost  on 
the  supply  side  can  there  be  found  a  common 
denominator,  or  standard,  or  determinant  of 
market  value,  or  of  price  as  its  money  expression. 
The  only  common  denominator  of  value  is  found 
in  selection  of  a  conventional  standard  for  that 
purpose,  a  price  commodity." 

This  clearly  is  equivalent  to  giving  up  as  a  bad 
job  the  attempt  to  find  that  much  desired  com- 
mon denominator  of  value,  and  to  formulate  a 
really  satisfactory  theory  of  value.  The  next 
chapter  presents  the  present  writer's  solution  of 
that  problem. 


Chapter  III. 

Value  Based  on  Labor  of  Standard 
Efficiency. 

I  now  proceed  to  lay  before  the  reader  my  own 
value  theory,  and  1  do  so  by  repeating  the  opening 
question:  What  is  value?  How  is  it  determ- 
ined? Why  is  one  thing  estimated  at  a  very  low 
value,  though  useful,  or  even  though  indispensa- 
ble, while  another  thing,  unnecessary,  and  per- 
haps not  even  useful,  is  estimated  as  of  high  val- 
ue? Why  does  the  man  who  performs  hard  and 
very  useful  labor  generally  receive  the  lowest 
wages,  while  another  may  be  paid  twice  or  tenfold 
as  highly,  whose  work,  when  critically  considered, 
may  be  found  of  doubtful  utility?  Such  things 
are  everyday  facts.  Why  are  they  so  ?  Upon 
what  grounds  are  such  facts  justified?  Or  are 
they  not  justified  at  all,  at  least  not  in  reason  and 
conscience?  Are  they  permitted  to  be,  merely 
because  of  unconscious  fraud  and  imposition  on 
the  part  of  those  who  thereby  gain  advantage, 
and  permitted  also  by  the  equally  unconscious 
ignorance  of  the  victims? 

Verily  so.  I  hold  that  all  oppressive  injustice, 
economic,  political,  or  social,  which  is  upheld  by 
custom  and  usage,  is  permitted  to  continue  be- 
cause of  the  general  ignorance,  the  ignorance  of 
both  appressor  and  oppressed,  the  ignorance  of 
the  man  who  derives  a  seeming  advantage,  as 
well  as  the  ignorance  of  those  who  suffer  because 
of  the  injustice.    And  so  it  is  with  the  injustice 

SI 


52  VALUE  BASED  ON  LABOR 

that  flows  from  the  world's  false  value  estimates. 
Right  here  it  may  be  asked :  who  is  to  blame  for 
this  ignorance,  who  is  responsible  for  the  false 
value  estimates  that  possess  the  minds  of  men 
even  to  this  day  ?  Who  else  but  the  moral  philos- 
ophers and  the  economists,  those  whose  particular 
business  it  should  be  to  instruct  and  enlighten 
the  world  upon  the  subject  of  value  and  sane 
value  estimates;  those  who  should  correct  the 
world's  false  value  notions,  rather  than  tabulate 
and  describe  the  false  and  foolish  value  concepts 
that  have  been  held  from  time  to  time.  Those 
are  to  blame,  if  on  the  whole  we  are  justified  in 
blaming  anybody,  or  any  class  of  men,  for  false 
notions  which  are  practically  universal,  and  for 
which,  in  a  sense,  the  race  at  large  must  shoulder 
the  responsibility  and  bear  the  consequences. 
However,  from  time  to  time  there  appears  a 
pioneer  to  open  up  new  paths  of  thought  and  to 
bring  new  light;  and  it  is  now  time  for  some- 
one to  formulate  a  value  theory  that  will  be  to 
economics  what  the  law  of  gravitation  is  to 
physics;  a  basic  principle  of  economics,  which 
will  relieve  the  chaos  and  confusion,  and  fur- 
nish a  foundation  upon  which  a  real  science  of 
economics  may  be  established.  And  what  is  that 
value  theory,  what  is  its  formula? 

I  closed  the  first  chapter  with  a  platform  propo- 
sition which  was  said  to  embody  my  value  theory 
in  a  concrete  statement.     That  statement  reads: 

Equal  compensation,  hour  for  hour,  for  all 
kinds  of  useful  work  of  standard  efficiency,  male 
or  female. 


OF  STANDARD  EFFICIENCY.  S3 

Let  US  analyze  this  statement  and  examine  its 
parts;  and  .let  us  see  how  they  connect  with  a 
concept  of  value : 

Equal  compensation,  remuneration,  wages, 
pay,  price  of  labor,  hence — value  estimate  of 
labor;  which  is  to  be  equal,  hour  for  hour. 

We  have  then  here  a  value  estimate  of  labor 
in  connection  with  the  time  element;  a  labor  time 
theory  of  value.  Labor  is  to  be  rewarded  accord- 
ingly as  it  produces  value;  and  that  reward  is 
to  be  equal  for  equal  time  upon  the  presumption 
that  this  labor  of  standard  efficiency  produces 
equal  values  hour  for  hour.  That  is  to  say:  one 
hour's  standard  work  in  one  occupation  or  field 
of  labor  produces  the  same  value  that  an  hour's 
standard  work  in  another  occupation  produces. 
This  presumption,  of  course,  has  to  be  proven 
true,  at  least  practically  true,  though  not  abso- 
lutely true,  yet  true  in  sufficient  measure  to  an- 
swer all  practical  purposes  of  associative  human 
life.  To  prove  this  is  the  present  writer's  task; 
upon  this  depends  his  entire  value  theory;  and 
if  he  cannot  convincingly  show  the  reasonable- 
ness of  this  proposition,  so  as  to  make  the  same 
acceptable  to  fairminded  intelligence,  then  his 
value  theory  falls  to  the  ground. 

To  assume  that  labor  in  equal  time  produces 
equal  value,  simply  labor,  without  any  qualifying 
specification,  that  is  so  preposterous,  so  contrary 
to  reason  and  sense,  that  no  one  assents  to  such 
a  statement;  and  practically  all  economists  have 
abandoned  a  bare  labor  time  theory  of  value,  how- 
ever sorely  they  needed  a  labor  cost  measure  of 
value.    Wherefore  they  endeavored  to  base  their 


54  VALUE  BASED  ON  LABOR 

value  theories  on  utility,  and  failing  there,  sought 
refuge  in  an  alleged  law  of  supply  and  demand. 
But  notice  that  I  have  not  said  labor,  or  work, 
without  adding  essential  qualifications.  In  the 
first  place  my  formula  specifies  "useful  work" — 
equal  compensation,  hour  for  hour,  for  all  kinds 
of  useful  work.  This  brings  the  element  of  util- 
ity into  the  "value"  based  upon  this  work. 

Next  I  specified  "work  of  standard  efficiency." 
This  eliminates  the  objection  which  otherwise 
would  hold,  that  the  lazy  or  inefficient  were  to  be 
rewarded  equally  with  the  industrious  and  the 
efficient,  on  the  ridiculous  assumption  that  the 
former  produce  as  much  value  or  utility  hour  for 
hour  as  the  latter.  This  matter  of  standard 
efficiency  will  be  explained  more  fully  later  on. 

The  third  qualification,  or  rather  an  added 
amplification,  is  in  the  words  "male  or  female" 
— "equal  compensation,  or  equal  value  estimate, 
hour  for  hour,  for  all  kinds  of  useful  work  of 
standard  efficiency,  male  or  female."  The  addi- 
tion to  the  formula  of  these  three  words  implies 
a  solution  of  the  vexing  question  of  woman's 
economic  dependence  upon  the  male  half  of  the 
race,  as  it  would  give  her  compensation  and  con- 
sideration equal  with  man,  whatever  her  line  of 
activity,  though  she  be  homemaker  and  house- 
keeper; and  it  would  secure  for  her  that  eco- 
nomic independence,  without  which,  equality  is 
but  a  word  without  meaning,  sound  without 
sense.  I  shall  not  in  this  treatise  touch  further 
upon  the  equal  rights  of  the  sexes ;  but  those  who 
are  interested  in  this  matter  would  do  well  to 


OF  STANDARD  EFFICIENCY.  55 

examine  the  promise  for  their  cause  that  lies  hid- 
den in  my  theory  of  value. 

The  above  gives  a  somewhat  dim  outline  of 
my  value  theory,  and  I  shall  now  try  to  make  it 
clearer  by  means  of  the  customary  definitions  of 
wealth,  value,  utility,  and  labor. 

I  find  no  fault  with  the  customary  definitions 
of  wealth,  as  any  material  object  that  directly  or 
indirectly  satisfies  human  wants,  need  or  desire. 
Also:  wealth  is  anything  possessing  value,  the 
product  of  labor,  capable  of  being  appropriated, 
and  limited  in  quantity.  Wealth  consists  of 
things  possessing  the  quality  of  value.  And 
value  is  generally  defined  as  the  particular  qual- 
ity of  any  object  or  substance  which  renders  it 
capable  of  satisfying  human  desire. 

Other  definitions  of  wealth  and  of  value  have 
been  offered,  some  very  odd  ones,  peculiar,  and 
I  should  say  quite  phantastic ;  but  generally,  defi- 
nitions of  wealth  and  of  value  are  as  given  above, 
closely  associating  wealth  and  value ;  and  accord- 
ing to  these,  wealth,  the  material  object,  must 
possess  utility.  Utility  is  but  another  name  for 
usefulness.  A  thing  to  be  wealth  must  then  be 
useful;  useful  for  what,  to  what  end?  It  must 
be  useful  to  satisfy  human  wants  or  desires.  * 
But  this  is  also  the  characteristic  of  value  as  de- 
fined above;  and  thus  we  have  utility  or  useful- 
ness and  value  closely  akin,  expressing  almost 
the  same  meaning.  There  is  this  difference, 
value  comprises  usefulness  and  adds   the   idea 


*  It  is  to  be  understood  that  these  wants  and  desires  should 
be  "legitimate;"  that  is  to  say,  they  must  be  such  that  their 
satisfaction  tends  to  preserve  or  enlarge  human  life. 


56  VALUE  BASED  ON  LABOR 

of  quantity,  of  something  measured  or  measur- 
able. Economists  have  distinguished  value  as 
value  of  use,  or  use  value,  and  as  exchange  value. 
Now,  value  is  the  product  of  labor,  and  in  order 
to  be  value  it  must  imply  usefulness,  it  must 
satisfy  human  desire;  it,  or  rather  the  material 
object  in  which  the  value  is  embodied,  must  be 
deemed  desirable  by  him  that  made  it,  or  it  must 
be  deemed  desirable  by  other  men  to  induce  them 
to  give  for  it  something  else  in  exchange.  And 
here  the  difficulty  enters  as  the  problem  of  ex- 
change value ;  it  assumes  the  form  of  a  question : 
How  much  of  this  thing,  the  product  of  A's 
labor,  shall  he  give  for  some  other  thing,  the 
product  of  B's  or  X's  labor?  How  shall  this 
exchange  value  be  measured,  or  determined,  as 
to  quantity?  This  is  the  question  which  has 
stumped  all  known  economists,  and  which  con- 
fessedly as  yet  remains  an  unsolved  problem. 

Adam  Smith,  Mill,  Carey,  and  many  others, 
uphold  in  the  main  the  labor  cost  doctrine  of 
value,  while  Jevons  and  the  Austrians  emphasize 
the  utility  doctrine  of  value.  As  stated  before,  I 
consider  either  one  of  these  doctrines  taken  by 
itself  as  explaining  value  to  be  a  half  truth;  both 
in  conjunction  are  required.  Utility  explains 
value  as  a  quality,  and  labor  cost  explains  it 
from  the  quantity  side;  labor  cost  gives  the 
measure,  the  amount  of  value  in  a  product.  It 
seems  strange  that  economists  have  been  so  per- 
sistent in  their  endeavor  to  base  their  value  con- 
cept on  one  single  element,  either  labor  cost  or 
utility,  though  nearly  all  realized  the  inadequacy 
of  either  of  these  elements  for  explaining  value 


OF  STANDARD  EFFICIENCY.  57 

without  recourse  to  the  other  also.  That  labor 
is  the  fundamental  source  of  value,  and  that 
value  is  proportionate  to  the  labor  involved  in 
producing  anything — little  labor  producing  little 
value,  more  labor  producing  more  value,  this 
seems  so  self-evident  as  to  suggest  itself  at  once 
as  an  irrefutable  truism.  And  on  the  other  hand 
it  is  just  as  self-evident  that  there  can  be  no  value 
unless  there  is  utility;  that  labor  which  does  not 
produce  utility,  somehow,  directly  or  indirectly, 
is  wasted,  is  barren  of  result  as  far  as  any  eco- 
nomic value  is  concerned.  Both  of  these  ele- 
ments, labor  cost,  and  utility,  are  essential  to  con- 
stitute value;  labor,  the  producing  agent,  and 
utility,  the  indispensable  condition  of  desirability, 
are  as  necessary  to  constitute  value,  as  two  fac- 
tors are  necessary  for  the  process  of  multiplica- 
tion, length  and  width  for  rectangular  surface3, 
or  two  chemical  elements  for  a  binary  compound. 
But,  after  all,  the  chief  trouble  does  not  lie  in 
any  failure  to  recognize  the  two-fold  composi- 
tion of  value,  but  in  the  failure  of  making  either 
of  these  elements  serve  as  a  measurer,  as  a  basis 
or  factor  to  determine  value  quantitatively,  to 
determine  the  amount,  the  ''how  much,"  of  value 
in  any  given  product,  commodity,  or  service. 
The  older  economists  started  with  labor  time  cost 
as  a  measure  of  value,  but  bumped  up  against 
the  fact  of  non-uniformity  of  effectiveness  in  the 
great  variety  of  labor,"  a  non-uniformity  all  the 
greater  as  they  took  into  their  calculations  labor 
from  the  furthest  ends  of  the  earth,  in  fact  any 
labor  that  by  its  products  enters  the  world  market 
in  international  trade.    Under  free  competition, 


58  VALUE  BASED  ON  LABOR 

open  world  markets,  and  into  the  general  all- 
around  conditions  of  the  18th  and  19th  centuries, 
a  labor  cost  determinant  of  value  could  not  be 
made  to  fit  in;  because  under  those  conditions, 
and  at  that  time,  it  was  impossible  to  reduce 
labor  to  the  required  homogeneity  which  must  be 
accorded  it,  if  it  is  to  serve  as  the  common  de- 
nominator in  which  to  express  the  value  of  all 
labor  products.  Of  this  I  shall  speak  more  fully 
further  on ;  suffice  it  for  the  moment  to  say,  that 
realizing  this  impossibility,  the  labor  cost  doc- 
trine advocates  presented  their  case  as  far  as 
circumstances  permitted,  and  let  it  go  at  that, 
with  the  result  of  having  their  doctrine  demol- 
ished by  their  critics,  who  for  the  greater  part  ad- 
vocated a  utility  value  measure  doctrine ;  and  this 
is  as  elusive  and  unsatisfactory  as  the  other,  and 
has  led  to  the  endless  subtleties  of  marginality. 
Others  again  fell  back  on  the  doctrine  of  demand 
and  supply  as  the  only  true  and  genuine  value 
determinant.  But  it  is  now  well  understood  that 
the  alleged  law  of  demand  and  supply  has  be- 
come a  mere  fiction  of  the  mind,  rather  than  an 
actually  operating  law  of  economics ;  that  instead 
of  regulating  values  and  prices,  supply  itself  is 
more  largely  regulated  by  commercially  power- 
ful individuals  or  interests.  In  consequence  of 
this,  economics  has  on  hand  an  unsolved  value 
problem,  and  as  a  science,  political  economy  is 
today  largely  discredited.  It  is  also  being  under- 
stood that  an  economic  regime  of  supply  and 
demand  is  becoming  something  obsolete;  some- 
thing not  in  keeping  with  the  spirit  of  this  age; 
something  that  belongs  to  a  past  period  in  eco- 


OF  STANDARD  EFFICIENCY.  59 

nomic  development,  a  period  of  chaos  and 
anarchy,  which  must  now  give  place  to  economic 
order,  regulation,  and  provision;  under  which, 
supply  of  economic  essentials  will  not  be  left  to 
haphazard  chance;  but  will  be  provided  by 
properly  instituted  authorities,  these  establishing 
a  regulated  price  of  commodities  and  a  supply 
somewhat  in  excess  of  the  actual  need;  thus 
making  the  operation  of  a  law  of  supply  and 
demand  a  thing  of  the  past,  at  least  as  far  as  the 
prime  necessaries  of  life  are  concerned. 

I  recur  now  to  my  aforementioned  task  of 
proving  true  the  presumption  that  labor  pro- 
duces equal  value  in  equal  lengths  of  time;  or, 
re-stating  this  in  the  phraseology  of  modern 
economists,  to  find  a  way  of  reducing  the  endless 
variety  of  labor  to  such  a  uniformity  as  a  value 
producer  that  it  may  serve  as  a  value  measurer, 
and  as  a  common  denominator  in  value  state- 
ments. This,  in  one  sense,  I  have  already  done, 
when  I  said  that  to  one  hour's  labor  of  standard 
efficiency,  wrought  in  one  occupation,  the  same 
value  is  to  be  ascribed,  and  the  same  potency  as 
a  value  producer,  as  is  ascribed  to  an  hour's  labor 
of  standard  efficiency  in  any  other  calling  or  occu- 
pation. But  this  needs  a  great  deal  of  additional 
elucidation.  Let  us  take  up  first  standard  effi- 
ciency of  labor.  What  is  the  meaning  of  that, 
what  does  that  imply?  Who  shall  set  this  stand- 
ard, and  how?  Let  me  say  in  passing,  that  while 
I  have  in  mind  chiefly  the  economics  of  the  future, 
yet  the  economics  of  the  present,  and  the  economic 
development,  the  trend  of  things  economic,  is  not 
disregarded  by  me;  and  these  things  justify  va- 


6o  VALUE  BASED  ON  LABOR 

rious  assumptions,  and  various  lines  of  reasoning, 
that  could  not  be  justified  if  economics  was  taken 
as  something  fixed  and  static.  Thus,  for  instance, 
we  see  a  continuous  increase  of  government  func- 
tion ;  of  inspection  and  supervision.  The  govern- 
ment mail  service,  though  already  an  old  institu- 
tion, is  constantly  being  enlarged  and  additions 
are  made  to  the  same.  Parcel  post  and  postal 
savings  banks  have  been  added,  while  the  taking 
over  of  the  telegraph  service  is  in  contemplation 
in  this  country,  and  already  established  in  many 
other  countries.  The  educational  institutions  are 
for  the  greater  part  publicly  owned  and  controlled, 
and  are  to  receive  an  enormous  extension  through 
vocational  training  features.  A  vast  inspection 
service,  national,  state,  and  local,  of  health,  food, 
factories,  mines,  buildings,  boilers,  elevators,  etc., 
has  for  some  time  been  in  existence  and  is  con- 
tinually being  extended.  Recently  irrigation, 
reclamation,  and  forest  service,  have  been  added. 
The  taking  over  by  the  state  of  railroads,  and 
by  municipalities  of  public  utilities,  street  car  sys- 
tems, lighting  and  water  supply,  is  contemplated 
and  seems  to  be  certain.  The  extension  of  gov- 
ernment supervision  or  control,  due  to  the  war, 
of  matters  formerly  left  to  private  control  in  all 
countries  afifected  by  the  war,  may  after  its  close 
be  largely  recalled,  but  much  of  it  will  remain  in 
force.  Add  to  this  the  great  number  of  men  in 
the  ordinary  administrative  and  judicial  service 
of  the  nation,  states  and  cities,  and  we  have  an 
enormous  army  of  government  employees,  whose 
duties  must  be  defined  and  compensation  fixed  by 
authority.     It  therefore  becomes  necessary,  as  a 


OF  STANDARD  EFFICIENCY.  6i 

matter  of  course,  that  standards  of  efficiency  be 
established,  and  rates  of  pay  fixed,  such  as  satisfy 
the  sense  of  fairness,  and  the  judgment  of  the 
nation. 

And  here  is  where  the  use  and  the  help  of  eco- 
nomic science  should  come  in,  to  assist  the  legisla- 
tor in  the  fixing  of  rates  of  pay  and  in  the  estab- 
lishing of  standards  of  efficiency,  by  reasoning 
out  the  principles  underlying  these  things;  and 
this  is  neither  more  nor  less  than  answering  the 
question,  what  is  value,  what  is  the  true  and  fair 
value  of  any  given  commodity,  what  is  the  value 
of  an  hour's  labor,  a  day's  work? 

Standards  of  efficiency  are  indeed  already 
established  in  various  lines  of  the  government 
civil  service,  and  to  some  degree  in  the  teaching 
profession,  while  in  both,  entrance  examinations 
are  required.  In  somewhat  similar  fashion  stand- 
ards of  efficiency,  which  entitle  to  full  or  stand- 
ard pay,  will  be  established  in  industrial  lines  of 
work,  where  such  work  comes  under  government 
control  in  nationalized  industries,  utilities,  or 
transportation  systems.  For  the  comparatively 
limited  number  of  industrial  workers  in  gov- 
ernment employ  in  the  past,  it  has  been 
customary  to  fix  the  rate  of  pay  in  accord- 
ance with  rates  prevailing  for  privately  em- 
ployed labor  of  similar  kind.  But  the  time 
is  coming  when  the  number  of  government  em- 
ployees will  be  so  vast  as  to  dominate  the  situa- 
tion, and  this  custom  will  be  reversed.  The  gov- 
ernment will  have  to  base  the  rate  of  pay  on 
some  fundamental  economic  principle,  instead  of 
on  the  blind,  haphazard,  and  unjust  rates  that 


62  VALUE  BASED  ON  LABOR 

have  ruled  in  the  general  business  world;  and 
then  the  standards  of  efficiency  and  the  rates  of 
pay  established  in  publicly  controlled  work  will 
be  patterned  after  and  largely  adopted  in  such 
industries  as  may  remain  under  private  control. 
It  is  of  course  perfectly  self-evident  that  the  ap- 
prentice in  any  line  of  work,  who  just  begins  to 
learn  his  trade  or  profession,  does  not  in  one 
hour  produce  as  much  value  as  does  the  ex- 
perienced worker,  and  therefore  could  not  in 
reason  be  entitled  to  the  same  compensation. 
Assuming  a  condition  when  the  labor  of  the  na- 
tions will  be  rationally  organized,  and  I  do  not 
mean  organized  for  economic  defense  in  trades 
unions  as  these  are  known  today,  but  organized 
for  effective  production,  a  condition  toward 
which  the  world  is  fast  moving,  the  standing  of 
workers  will  shape  itself  somewhat  in  this 
manner : 

Vocational  training  in  schools  will  be  coordi- 
nated with  the  actual  industrial  work,  and  per- 
haps to  a  great  extent  merge  with  the  same  dur- 
ing apprenticeship.  The  length  of  actual  ap- 
prenticeship will  be  A^ery  much  reduced ;  probably 
two  years  will  be  the  maximum,  but  no  truancy 
or  running  away  to  take  work  elsewhere  will  be 
permitted.  The  apprentice  will  receive  pay  com- 
mensurate for  an  apprentice,  with  a  suitable  in- 
crease perhaps  every  six  months.  After  serving 
out  the  required  apprenticeship  the  young  per- 
son, male  or  female,  will,  upon  passing  a  proper 
test,  be  advanced  to  the  grade  of  junior  work- 
man, with  a  corresponding  increase  of  pay  for 
another  period  of  perhaps  two  years;  and  will 


OF  STANDARD  EFFICIENCY.  63 

then  graduate  into  the  class  of  senior  workman, 
receiving  full  standard  pay;  and  will  be  required 
to  demonstrate  that  he  can  and  habitually  does 
perform  a  fair  day's  work,  in  other  words,  that 
he  has  reached  and  maintains  standard  efficiency. 
The  greater  number  of  men  will  probably  be  per- 
fectly satisfied,  and  quite  happy  to  continue  in  this 
grade  during  the  active  working  period  of  their 
lives,  say  from  about  the  twentieth  to  the  six- 
tieth year,  free  from  care,  worry,  or  anxiety 
about  their  jobs,  free  men  among  their  equals, 
their  livelihood  secure  against  the  pecuniary  dis- 
tress due  to  failure  of  employment,  that  in  present 
society  afflicts  and  oppresses  many.  Others,  who 
have  the  ambition  or  desire,  may  advance  to  the 
grade  of  master  workman  and  qualify  as  fore- 
men or  supervisors  with  but  slight  if  any  in- 
crease of  pay.  All,  as  they  advance  in  age,  and 
gradually  decline  in  strength  and  efficiency,  will 
be  classed  as  veterans  with  correspondingly  re- 
duced pay,  and  finally  be  retired  on  a  suitable 
pension.  This  briefly  outlines  a  possible  scheme 
of  organizing  the  productive  labor  of  the  nation 
in  such  manner  as  to  leave  no  one  out  of  employ- 
ment, society  assuming  the  duty  of  finding  em- 
ployment for  all,  or  rather  of  apportioning  the 
same,  so  that  no  one  need  be  without  employment 
and  wages.  There  is  to  be  no  "hindmost"  for 
the  devil  to  take.  How  society  can  find  employ- 
ment and  wages  for  all  may  not  be  clear  to  the 
reader  at  this  stage;  it  will  be  more  fully  ex- 
plained in  Part  III.  For  the  moment  I  can  only 
repeat  what  was  indicated  on  a  former  page,  that 
there  would  be  a  sufficient  flow  of  purchasing 


64  VALUE  BASED  ON  LABOR 

power  back  to  the  multitude  of  workers  to  insure 
a  steady  consumption  of  goods  produced,  and  a 
continuous  "effective"  demand  for  the  same,  so 
as  to  make  over-production,  glut,  and  stagnation 
of  work  impossible. 

This  excursion  into  details  may  perhaps  be 
objected  to  as  not  germane  to  the  question  of 
what  is  value;  but  it  was  brought  in  to  illustrate 
and  make  clear  what  the  writer  means  by  "labor 
of  standard  efficiency."  A  fair  day's  work  has 
in  many  callings  quite  a  definite  meaning,  espe- 
cially in  the  building  trades.  There  it  means  a 
certain  number  of  bricks  laid,  so  many  squares 
of  flooring,  lathing,  plastering,  shingling,  or 
painting.  In  other  lines  the  work  naturally  falls 
into  piece  work;  so  many  shoes,  hats,  gloves, 
shirts,  etc.  Experience  establishes  a  certain 
amount  of  work,  which  the  average  capable 
worker  accomplishes  in  a  certain  number  of 
hours  with  reasonable  exertion,  and  which  is 
g-enerally  called  a  fair  day's  work.  This  is  what 
T  mean  by  work  of  standard  efficiency,  and  such 
work  will  be  expected  of  the  graduated  journey- 
man worker  or  senior  workman;  but  this  does 
not  imply  stop-watch  methods  of  speeding  up  to 
a  near  breaking  point. 

Now,  my  value  theory  presupposes  equal  pay 
for  all  kinds  of  useful  work  of  standard  efficiency. 
If  this  be  conceded,  then  we  have  in  this  labor  of 
standard  efficiency  the  required  value  denomi- 
nator ;  the  basis  and  the  measurer  of  all  economic 
values,  the  means  of  determining^  the  value  of  all 
general  market  commodities.  The  value  and  the 
price  of  all  staple  articles  in  the  market  will  de- 


OF  STANDARD  EFFICIENCY.  65 

pend  upon  how  many  hours  of  this  standard 
labor  is  embodied  therein.  And  so  far,  the  value 
problem  is  solved,  reserving  the  question  of  ulti- 
macy  in  value  determination  to  be  taken  up 
further  on. 


Chapter  IV. 

Economic     Status    of    Professionals    and 

Artists. 

But  objection  will  be  made  against  putting 
skilled  and  unskilled  labor  upon  the  same  level 
of  compensation.  And  some  will  ask :  how  about 
the  artist,  the  poet,  and  the  preacher ;  what  about 
the  inventor  and  the  captain  of  industry,  and 
those  who  follow  the  professions  of  law,  medi- 
cine, or  of  teaching? 

As  to  equal  compensation  for  skilled  and  for 
unskilled  labor,  that  I  shall  have  to  discuss  at 
some  length;  but  I  will  not  go  into  much  detail 
in  regard  to  the  economic  status  of  artists  or  of 
the  learned  professions.  This  matter  could  be 
brushed  aside  by  pointing  out  that  these  people 
do  not  come  within  the  purview  of  economics. 
They  are  not  producers  of  wealth,  strictly  speak- 
ing, nor  do  they  render  any  direct  economic 
service.  Only  in  an  indirect  and  often  very  re- 
mote manner  can  it  be  claimed  that  they  con- 
tribute to  the  production  of  material  wealth;  and 
such  unwarranted  inclusion  of  things  irrelevant, 
as  factors  in  the  analysis  of  economic  problems, 
has  caused  confusion  in  economics  and  left  the 
same  with  an  unsolved  value  problem.  Now 
while  these  people  unquestionably  contribute  to 
welfare,  especially  doctors  and  teachers,  yet  they 
produce  no  exchangeable  commodities  that  cir- 
culate in  the  market,  the  value  of  which  it  is  our 
problem  to  determine,  and  this  value  I  propose 

66 


PROFESSIONALS  AND  ARTISTS.  67 

to  measure  by  the  hour  unit  of  standard  indus- 
trial labor.  It  is  claimed  that  economics  is  con- 
cerned with  wealth,  not  with  welfare,  I  have 
in  chapter  I.  severely  condemned  the  opinion  that 
would  ignore  welfare  and  exclude  it  from  the 
consideration  of  economists.  Let  me  here  ampli- 
fy by  saying,  that  economics  is  properly  con- 
cerned with  wealth,  and  with  that  welfare 
which  is  conditioned  on  a  just  distribution  of 
material  wealth,  especially  upon  a  just  distri- 
bution of  the  nation's  annual  income,  the  national 
dividend,  and  upon  such  apportionment  of  em- 
ployment, as  would  leave  in  enforced  idleness  no 
one  who  is  able  and  willing  to  work.  With  this 
wealth  and  welfare,  artists,  preachers,  and  the 
professions  have  nothing  to  do,  or  at  the  most 
only  in  a  very  indirect  way.  But  a  correct  politi- 
cal economy  has  very  much  to  do  with  this  wel- 
fare, and  so  has  a  theory  of  value  which  would 
raise  the  meanest  paid  labor  up  to  equal  compen- 
sation with  other  industrial  labor. 

Here  I  might  drop  the  consideration  of  the  eco- 
nomic status  of  the  classes  alluded  to  above. 
However,  though  these  people  stand  outside  the 
proper  province  of  economics,  they  do  not  stand 
outside  human  society;  and  I  do  not  in  any  way 
imply  that  they  are  engaged  in  activities  that  are 
not  useful.  On  the  contrary,  most  of  them  are 
highly  useful  members  of  society,  and  some  of 
them  eminentlv  so;  and  a  little  prognostication 
may  not  be  amiss,  as  to  the  status  of  these  people 
under  the  economic  regime  toward  which  the 
world  is  fast  drifting,  and  of  which  I  feel  sure 
the  equal  compensation  feature  will  be  a  most 


68  ECONOMIC  STATUS  OF 

distinguishing  characteristic.  Lawyers,  as  we 
know  them  today,  may  largely  disappear;  they 
will  probably  become  salaried  functionaries  ot 
the  courts,  assisting  in  the  dispensation  of  jus- 
tice, rather  than  using  their  wits  to  block  justice 
in  the  interest  of  their  clients,  as  so  often  is  the 
case  today.  Doctors  and  teachers,  while  a  com- 
paratively small  number  may  follow  their  pro- 
fession privately,  by  far  the  greater  number  will 
be  publicly  employed  as  are  the  public  school 
teachers  now,  and  at  salaries  that  are  approxi- 
mately on  a  level  with  the  compensation  of  skilled 
mechanics.  Like  the  police,  guardians  of  peace, 
and  fire  department  men,  guardians  of  fire  pro- 
tection, doctors  will  be  guardians  of  health  and 
sanitation,  on  duty  in  hospitals,  dispensaries, 
bureaus,  and  medical  call  stations;  and  they  will 
be  publicly  employed  at  salaries  similar  to  those 
paid  other  administrative  employees  generally. 
Let  it  be  remembered,  and  fully  realized,  that  the 
compensation  of  all  such  public  employees,  whose 
labor  does  not  result  in  concrete  material  objects 
which  in  themselves  embody  the  value  of  their 
work,  that  all  these  employees  must  be  paid  from 
a  fund  created  by  contributions  from  or  taxes 
upon  the  producers  of  actual  economic  wealth, 
the  great  laboring  multitude,  or  by  fees  exacted 
from  them.  When  this  is  fully  realized,  and 
when  we  know  that  in  a  real  democracy  this  mul- 
titude make  up  the  voting  constituency  whose 
final  sanction  upon  questions  of  taxation  is 
necessary,  as  well  as  necessary  for  the  granting 
of  salaries  and  compensation  for  public  employees 
of  all  sorts,  then  we  may  well  assume  that  a  senti- 


PROFESSIONALS  AND  ARTISTS.  69 

ment  for  approximate  and  reasonable  equality  of 
compensation  in  these  various  lines  of  work  will 
be  distinctly  dominant.  As  to  the  artist,  the  poet, 
and  the  preacher  or  moralizing  philosopher,  all 
these  stand  distinctly  outside  the  scope  of  eco- 
nomic consideration ;  and  the  value  or  worthless- 
ness  of  their  work  has  nothing  to  do  with  eco- 
nomic value  and  its  determination.  It  is  simply 
childish  to  include  in  the  discussion  and  analysis 
of  economic  value  such  things  as  the  decalogue, 
pictures  or  sculptures  by  dead  or  by  living  mas- 
ters, old  coins  or  other  archeological  curios,  the 
value  of  a  horse  to  a  fleeing  prisoner,  or  the 
value  of  a  plank  or  a  life  preserver  to  a  drown- 
ing man.  The  value  of  a  horse  or  a  plank  must 
be  determined  under  ordinary  conditions  in  the 
market  of  economic  exchange,  not  under  special 
or  abnormal  conditions  as  means  of  saving  men's 
lives.  Curios  and  works  of  art  do  not  belong  in 
the  realm  of  economics.  Artists,  poets,  and 
preachers  will  have  to  find  their  pecuniary  status 
much  as  they  do  today,  with  this  difference:  in 
the  future  society  there  will  be  no  occasion  for 
artists  or  for  any  kind  of  misfit  genius  to  starve 
in  a  garret;  for  if  their  art  should  fail  to  support 
them  they  could  always  find  the  doors  of  some 
public  employment  office  open,  with  opportimity 
of  earning  a  decent  livelihood  by  honest  labor  of 
some  suitable  kind.  What  has  i3een  stated  about 
artists  and  poets  does  also  largely  apply  to  in- 
ventors, captains  of  finance  and  industry.  The 
function  of  a  captain  of  finance  will  probably  be- 
come obsolete;  the  captain  of  industry  may  or 
may  not  find  a  place  in  the  new  order;  if  so,  he 


70  ECONOMIC  STATUS  OF 

and  the  inventor  will  be  in  a  special  class,  and 
will  be  compensated  according  to  what  the  gen- 
eral opinion  deems  fair  and  just.  The  work  oi 
poets,  prophets,  and  philosophers  may  be  worth- 
less, or  it  may  be  valuable  beyond  estimate  in 
money  or  money  equivalents.  Very  likely  such 
work  would  not  be  appraised  quickly,  generally 
not  before  the  latter  years  of  such  lives;  and  it 
would  quite  generally  be  performed  during  hours 
of  leisure  from  livelihood  pursuits,  as  indeed  is 
largely  the  case  now,  and  its  reward  would  most- 
ly be  in  honors  rather  than  in  things  pecuniary. 
If,  however,  the  people  at  any  time  see  fit  to 
bring  their  offerings,  or  to  tax  themselves,  in 
order  to  bestow  high  pecuniary  rewards  upon 
some  artist,  musician,  singer,  actor,  or  circus 
clown,  poet  or  preacher,  inventor  or  scientist;  or 
to  pay  princely  salaries  to  a  king,  president,  gov- 
ernor, mayor  or  high  court  judge,  so  let  them  do, 
as  long  as  in  their  judgment  the  services  of 
these  people  are  worth  such  price.  But  all  this 
is  apart  from  economic  value,  and  has  nothing 
to  do  with  determining  the  value  of  a  day's  work 
at  ordinary  economic  labor,  the  labor  that  pro- 
duces subsistence  and  material  wealth. 

Just  one  more  thought  in  this  connection  to 
show  the  falsity  of  men's  value  estimates,  and 
how  absurdly  the  world  has  been  in  the  habit 
of  overestimating  the  importance  of  artists  and 
inventors,  and  underestimating  the  humble  toiler, 
especially  the  tiller  of  the  soil.  Suppose  Caruso 
and  Paderewski  should  die  tomorrow  and  no  one 
be  competent  to  take  their  places.  Would  the 
world  stand  still?    The  papers  would  announce 


PROFESSIONALS  AND  ARTISTS.  71 

the  fact,  and  the  next  day  these  men  would 
merely  be  a  memory  and  a  name,  except  in  the 
little  circle  of  their  immediate  family  and  per- 
sonal friends,  beyond  which  their  passing  would 
scarcely  be  felt.  Suppose  Edison  and  the  others 
had  not  given  us  the  electric  light  and  the  phono- 
graph; would  anyone  sit  down  and  cry  about  it? 
Not  at  all,  but  if  there  should  be  a  great  crop 
failure,  many  might  have  occasion  to  weep,  and 
quite  a  number  might  perish.  What  has  the  in- 
vention of  the  aeroplane,  the  dirigible,  and  the 
submarine  done  for  the  world?  Made  war  more 
horrible,  and  so  far  nothing  else,  and  I  doubt  if 
they  really  ever  will  be  anything  else  than  means 
of  destruction  or  toys  for  fools.  Suppose  that 
for  ten  years  to  come  all  inventors  were  to  stop 
work,  nothing  at  all  was  to  be  invented,  would 
anyone  cry  or  be  in  distress?  By  no  means,  in 
fact  no  one  would  feel  the  difference.  But  let  all 
the  farmers  stop  work  for  a  single  year  and  the 
race  would  perish.  Who  then  is  the  more  im- 
portant, the  farmer  or  the  inventor?  The  ques- 
tion answers  itself;  and  here  is  hoping  that  the 
answer  may  permeate  the  heads  of  bumptious 
individuals,  whom  chance  of  birth  and  fortune 
has  placed  in  favored  positions,  from  which  they 
look  down  with  supercilious  contempt  upon  the 
humble  tiller  of  the  soil.  May  the  answer  dis- 
solve out  of  such  heads  some  of  that  self-conceit 
which  is  one  of  the  chief  curses  of  the  human 
race.  I  could  continue  to  discourse  along  this 
line  on  many  pages,  but  this  would  weary  some 
readers,  so  I  break  off.  I  have  tried  to  show 
that  certain  people,  and  their  work,  have  been 


72  ECONOMIC  STATUS  OF 

very  much  overrated;  also  that  the  work  of 
these  people  does  not  enter  into  the  analysis  and 
determination  of  economic  value,  and  does  not 
necessarily  enter  into  the  equal  compensation 
scheme.  Yet  some  of  them  will  come  completely 
under  the  influence  of  that  scheme,  and  all  will 
be  greatly  affected  thereby,  directly  or  indirectly. 
Before  passing  on  I  want  to  corroborate  what 
I  have  here  maintained  as  to  the  work  of  artists 
and  the  learned  professions  being  not  productive 
of  material  wealth,  and  not  coming  within  the 
proper  province  of  economics.  And  I  do  so  with 
a  quotation  from  an  accredited  economist,  J.  L. 
Laughlin,  at  that  time  professor  at  Harvard  Uni- 
versity. He  says:  "We  can  see  then,  that  in  the 
wonderful  mechanism  of  society,  men  are  work- 
ing to  produce  wealth,  and  to  satisfy  one  another's 
material  wants.  All  the  world,  so  far  as  they 
are  thus  engaged  in  supplying  their  material 
wants,  are  doing  things  with  which  political 
economy  is  concerned.  H  men  are  occupied  with 
other  affairs  than  these,  they  are  not  things  with 
which  the  economist  is  concerned.  Political 
economy  deals  only  with  questions  connected  with 
wealth,  and  with  the  satisfaction  of  material 
wants.  But  according  to  some  writers,  not  all 
wealth  is  material.  You  can  see  and  touch  a  nail, 
a  basket,  a  gun,  land,  or  diamonds;  but  this  is 
not  true  of  all  things.  You  cannot  see  or  touch 
capacity  or  mental  power.  If  these  things  can 
be  called  wealth,  they  are  not  material  wealth, 
and  are  not  capable  of  being  transferred  from 
one  person  to  another  as  a  coat  or  a  hat  may. 
Most  people  are  engaged,  directly  or  indirectly, 


PROFESSIONALS  AND  ARTISTS.  73 

in  collecting  material  wealth,  and  as  only  such 
wealth  can  be  appropriated  and  exchanged,  we 
shall  be  understood  as  speaking  of  material 
wealth  hereafter,  unless  particular  mention  is 
made  of  immaterial  wealth."  Condensed  from 
pages  4,  5,  and  6,  introductory  chapter  of  "Prin- 
ciples of  Political  Economy,"  by  J.  L.  Laughlin; 
Appleton  Science  Series  edition,  1888. 


Chapter  V. 

Equal  Value  of  and  Equal  Compensation 
FOR  All  Kinds  of  Skilled  Labor. 

The  next  step  in  my  argument  will  be  to  show 
reasons  why  skilled  and  unskilled  labor  should 
be  estimated  of  equal  value,  and  should  be  com- 
pensated at  the  same  rate  hour  for  hour.  I  realize 
that  here  I  am  up  against  an  almost  unsur- 
mountable  mountain  of  prejudice,  fortified  by 
centuries  of  custom;  and  I  almost  lose  heart  as 
I  think  of  it.  But  the  gauge  of  battle  has  been 
thrown,  and  there  must  be  no  shirking.  I  shall 
begin  then  by  attacking  this  prejudice  at  its  weak- 
est point;  and  that  is  by  arguing  the  essential 
equality  in  point  of  worth  and  value  of  the  various 
mechanic  trades. 

Upon  what  grounds  of  reason  should  the  work 
of  the  tailor  and  his  product  be  esteemed  more 
valuable  than  the  work  of  the  shoemaker  or  the 
hatter?  That  of  the  blacksmith,  machinist,  or 
molder  of  greater  value  than  that  of  the  carpenter 
or  mason,  painter  or  tinner?  And  so  on  down 
the  long  line  of  mechanic  trades,  all  of  which  are 
indispensable  and  enter  into  the  make-up  of  man's 
daily  necessaries,  food,  clothing,  and  shelter.  But, 
it  will  be  said,  work  ought  to  be  paid  according 
to  the  skill  of  the  worker.  Well  then,  please  tell 
me,  whoso  can,  which  of  these  trades  involves 
the  greater  skill?  Mason,  molder,  machinist; 
tinner,  carpenter,  tailor,  miller,  weaver,  painter, 
etc.    Is  it  the  mason  or  is  it  the  plumber,  trades 

74 


FOR  ALL  KINDS  OF  SKILLED  LABOR.  75 

which  long  have  ranked  high  in  point  of  wages; 
some  thirty  years  ago  nearly  double  that  of  the 
carpenter  and  cabinetmaker,  though  these  un- 
doubtedly required  a  higher  order  of  skill.  Who 
shall  decide  this  among  all  the  numerous  trades  ? 
Shall  it  be  left  to  each  trade  to  decide  whether 
itself  is  the  most  skillful,  most  important,  and 
therefore  entitled  to  the  highest  rate  of  pay  ?  Evi- 
dently not;  the  thought  is  as  absurd  as  letting  a 
claimant  in  court  decide  his  own  case.  What  then 
shall  we  do;  how  shall  we  decide  this  question? 
Let  it  be  remembered  that  the  reward  for  labor 
should  have  some  regard  to  the  irksomeness,  the 
burdensomeness  of  the  work,  to  what  economists 
have  called  the  labor  pain.  Of  this  more  will 
be  said  presently.  Let  it  also  be  remembered 
that  the  lesser  the  skill  in  any  branch  of  work, 
the  coarser  it  usually  is,  the  heavier,  the  more 
burdensome  and  exhaustive  the  toil.  This  should 
be  taken  into  consideration  to  offset  the  higher 
skill  as  a  value  element.  And  the  more  we  puzzle 
over  the  problem,  the  more  must  we  come  to  the 
conclusion  that  the  only  solution  is  to  award 
equal  compensation,  hour  for  hour,  in  all  kinds 
of  skilled  trades.  How  are  these  rates  of  pay 
fixed  under  the  conditions  of  present  society? 
By  the  illogical,  crude,  haphazard  method  of 
competition  under  an  alleged  law  of  supply  and 
demand;  by  an  abominable  grab  and  catch  as 
catch  can  scramble  for  vantage.  Or  rather  they 
are  not  settled  at  all ;  for,  as  a  fact,  these  matters 
continue  in  a  state  of  turmoil  and  trouble,  of 
chaos  and  disorder,  causing  no  end  of  strikes  and 
disputes,  often  attended  by  violence.     No  sooner 


76  EQUAL  VALUE  AND  COMPENSATION 

has  one  trade  gone  on  a  strike  and  gained  an  ad- 
vance in  pay  than  another  starts,  and  then 
another,  or  several  at  the  same  time.  And  when 
the  last  strikers  have  gotten  their  raise,  the  first 
start  over  again.  This  cannot  go  on  forever.  A 
way  must  be  found  to  settle  the  wages  question 
so  it  will  stay  settled;  a  way  that  will  make  an 
end  of  the  industrial  war,  the  strife  and  the 
strikes.  A  principle  must  be  found  upon  which 
to  determine,  once  and  for  all,  the  wages  of  labor 
with  a  fairness  that  is  beyond  dispute  and  is  ap- 
parent to  every  reasonable  and  open-minded 
man.  And  that  is  the  principle  of  equal  compen- 
sation, the  basis  of  the  value  theory  propounded 
in  this  book. 

I  remember  hearing  my  father  tell  how  in  his 
own  young  days  he  participated  in  the  frequent 
brawls  indulged  in  by  various  crafts;  how  the 
members  of  one  craft  hated  and  despised  the 
members  of  another  craft,  resulting  in  regular 
fights,  such  as  even  now  take  place  between  young 
rowdies  of  one  neighborhood  with  the  street 
rowdies  of  another  neighborhood,  or  between  the 
larger  boys  from  rival  schools.  It  seems  the  tail- 
ors were  especially  made  the  victims  of  the  ani- 
mosity and  contempt  of  the  more  robust  mechan- 
ics belonging  to  other  crafts;  but  all  united  in 
heaping  contempt  and  scorn  upon  the  tiller  of  the 
soil.  The  literature  of  those  times,  and  indeed 
of  our  own  days,  will  bear  witness  to  this  fact, 
and  prove  that  this  hateful  and  unbrotherly  spirit 
still  survives  in  an  altogether  too  large  measure. 
Practically  all  comic  prints  are  still  engaged  in 
the  task  of  heaping  contempt  upon  farmer  Hay- 


FOR  ALL  KINDS  OF  SKILLED  LABOR.  ^^ 

seed  and  Corntossel,  and  are  using  such  expres- 
sions as  "rube,"  "country  jay,"  and  the  Hke. 
Men  have  hated  and  injured  each  other  in  the 
past  because  of  difference  of  race,  nationahty, 
and  rehgion;  and  also  because  of  difference  of 
calhng,  difference  of  work.  How  foohsh,  how 
unspeakably  foolish.  A  great  deal  of  this  still 
remains,  but  much  has  been  done  away  with,  due 
to  the  growth  of  tolerance  and  of  general  intelli- 
gence. And  but  little  remains  of  jealousy,  malice, 
and  hatred  among  the  various  skilled  trades. 
This  is  due  to  the  many  fraternities  of  various 
kinds,  and  especially  due  to  the  trades  unions, 
their  central  labor  unions,  and  the  national  fede- 
ration of  labor,  as  well  as  to  the  socialist  propa- 
ganda. Is  it  too  much  to  hope  that  these  men  are 
ready  for  that  widening  of  heart  and  mind  which 
would  accord  to  other  crafts  the  same  usefulness, 
worth,  and  value,  and  therefore  the  same  rate  of 
pay  that  is  claimed  for  their  own  ?  To  doubt  this 
would  be  to  deny  them  capacity  for  ordinary  rea- 
son, honesty,  and  common  sense. 

Let  us  suppose  that  a  number  of  crafts,  from 
A  to  Z,  are  under  the  jurisdiction  of  some  cen- 
tral labor  union ;  and  that  of  these  crafts,  A  forces 
its  rate  of  wages  up  to  say  $5.00  per  day.  After 
a  while  craft  B  does  the  same ;  then  craft  C,  and 
so  do  from  time  to  time  all  the  rest  down  to  X, 
Y,  and  Z.  Is  it  to  be  supposed  for  a  minute,  that 
the  other  crafts  which  had  effected  a  $5.00  rate 
would  oppose  crafts  X,  Y,  and  Z,  in  doing  the 
same?  No,  that  would  be  unthinkable  for  the 
mere  shame  of  it.  Can  it  even  be  supposed  that 
crafts  A  and  B  would  argue  that  if  crafts  X  and 


78  EQUAL  VALUE  AND  COMPENSATION 

Y  got  $5.00,  then  A  and  B  ought  to  get  $6.00  or 
$7.00  per  day?  Yes,  this  can  be  supposed  as 
long  as  the  minds  of  men  are  perverted  by  false 
notions  of  value,  taught  and  upheld  by  a  false 
economic  doctrine,  according  to  which  the  world 
of  business  and  its  rewards  are  looked  upon  as 
being  like  the  uncountable  fishes  in  the  boundless 
seas,  where  a  man's  catch  depends  mostly  upon 
his  luck  and  the  weather's  favor.  According  to 
this  idea,  if  one  man  catches  twice  as  many  fish 
as  his  neighbor,  that  is  purely  a  matter  of  chance 
and  good  fortune;  and  is  in  no  wise  dependent 
upon  the  ill-luck  of  the  neighbor,  nor  is  it 
achieved  at  the  expense  of  the  neighbor.  And 
much  like  this  is  the  general  notion  about  the  re- 
wards of  business  and  the  rate  of  wages,  which 
is  supposed  in  some  vague  manner  to  depend 
upon  a  mysterious  wages  fund,  instead  of  being, 
as  it  really  is,  drawn  directly  or  indirectly  from 
the  ultimate  consumer.  But  when  it  is  clearly 
and  distinctly  understood  that  wages  and  salaries, 
profits  and  dividends,  in  any  line  of  economic 
work  productive  of  material  wealth,  are  paid  by 
the  ultimate  consumer ;  that,  in  the  final  analysis, 
the  wages  of  men  in  craft  A  are  paid  by  the 
men  in  B,  C,  D,  on  down  to  Z;  the  wages  of 
men  in  craft  B,  by  those  in  A,  C,  D,  and  all  the 
rest,  and  so  on  along  the  v^^hole  line;  those  of  Z 
are  paid  by  all  the  rest ;  when  this  is  understood, 
then  the  whole  wages  question  will  be  seen  in  nn 
altogether  different  light;  and  it  is  hardly  to  be 
expected  that  the  members  of  any  one  craft  or 
calling  would  have  the  nerve  or  the  impudence 
to  claim  for  their  particular  craft  a  higher  rate 


FOR  ALL  KINDS  OF  SKILLED  LABOR.  79 

of  pay  than  they  were  willing  to  accord  another 
craft.  If  they  did,  they  would  probably  be 
laughed  at. 

Lest  the  reader  should  overlook  it,  let  me  re- 
mind him  that  I  am  speaking  of  mechanic  trades, 
so-called  skilled  labor,  not  of  professionals  or 
artists,  or  any  of  those  who  might  claim  special 
compensation  on  special  grounds.  The  case  of 
such  has  already  been  discussed,  and  may  be 
further  considered  later  on.  But  the  present 
argument  deals  with  mechanics  and  workers  in 
the  various  industries;  particularly  with  those 
engaged  in  producing  the  staple  necessaries  of 
life;  those  things  that  constitute  the  food,  cloth- 
ing and  shelter,  and  the  ordinary  comforts  of 
people  in  general ;  those  things  of  which  the  mass 
of  the  people  are  the  ultimate  purchasers  and  con- 
sumers, and  the  production  of  which  furnishes 
by  far  the  greater  part  of  the  world's  employ- 
ment. It  is  true,  that  a  certain  percentage  of 
employment  is  yet  furnished  by  the  rich,  the  well- 
to-do,  for  luxuries  and  personal  service.  And 
a  century  or  two  ago  that  percentage  was  so 
large  that  some  of  the  older  economists  must 
have  believed  it  was  the  rich  who  furnished  prac- 
tically all  employment  for  labor ;  and  this  thought 
does  indeed  in  a  measure  underlie  the  wages 
fund  notion.  But  times  change,  the  old  order 
gives  place  to  the  new.  With  the  rise  of  the 
people  and  the  growth  of  democracy,  the  center 
of  economic  gravity  has  shifted,  and  the  source 
of  employment  is  now  mainly  in  the  multitude 
itself.  And  it  is  realized  that  even  the  money 
which  the  rich  spend  for  luxuries  and  for  per- 


8o  EQUAL  VALUE  AND  COMPENSATION 

sonal  service,  and  by  which  they  furnish  a  cer- 
tain amount  of  employment,  even  this  money  is 
in  great  part  acquired  by  exploitation  of  labor  or 
by  profiteering  upon  the  consuming  public.  How- 
ever, this  is  a  phase  of  economics  which  I  do  not 
intend  to  discuss  in  this  treatise  on  value.  I  claim 
my  value  theory  to  be  true  irrespective  of  whether 
land  is  held  as  private  property  or  not,  true  under 
private  capital  or  collective.  As  long  as  profit, 
interest,  and  rent  continue,  these  will  merely  be 
minor  items  added  to  the  cost  and  included  in 
the  selling  price  of  commodities;  an  increase  of 
cost  and  of  price  which  will  diminish  as  collec- 
tive capital  gradually  replaces  private  capital, 
and  as  collective  ownership  of  land  supersedes 
private  ownership.  These  matters  also  lie  be- 
yond the  scope  of  this  book.  But  I  repeat,  be- 
cause I  want  to  emphasize  it,  and  it  can  not  be 
too  much  emphasized,  that  as  far  as  the  ordinary 
necessaries  of  life,  the  great  staples  of  produc- 
tion and  of  business  are  concerned,  the  multi- 
tude are  the  ultimate  consumers;  and  it  is  they 
who  in  these  lines  of  work  furnish  the  employ- 
ment and  really  pay  the  wages  of  the  labor  in- 
volved. I  also  want  to  emphasize  that  it  is  upon 
these  things,  the  great  staples  of  production,  and 
upon  their  abundance,  or  at  least  their  sufficiency, 
that  the  well-being  of  a  nation  depends;  and  with 
these  things  particularly,  and  with  their  proper 
evaluation,  are  my  economics  and  my  value  theory 
concerned.  These  things  in  particular  are  as- 
sumed to  have  equal  value  for  equal  length  of 
labor  time  embodied  therein,  such  labor  being 
of  standard  efficiency  as  explained  on  a  previous 


FOR  Alh  KINDS  OF  SKILLED  LABOR.  8i 

page ;  and  hence  also  such  labor  is  of  equal  value, 
and  entitled  to  equal  compensation,  hour  for  hour^ 
This,  it  seems  to  me,  ought  to  be  perfectly  clear 
to  all  skilled  workers,  that  insofar  as  any  one 
class  among  them  is  useful,  produces  a  useful  or 
necessary  commodity,  or  renders  an  essential 
service,  then  the  labor  in  that  class  should  be 
accorded  equality  of  value,  and  equal  compensa- 
tion with  the  others.  Any  one  trade  which  would 
insist  on  higher  compensation  than  the  others, 
would  simply  show  a  desire  for  a  httle  profiteer- 
ing for  itself. 

Suppose  there  is  after  all  a  slight  difference  in 
point  of  skill  or  in  burdensomeness  between  cer- 
tain trades.  It  is  not  possible  now,  and  it  will  not 
be  possible  then,  to  calculate  these  matters  to  an 
extreme  nicety,  to  a  minute  fraction  of  a  cent. 
Greater  deviation  from  minutely  exact  justice  in 
the  setting  of  wages  and  assignment  of  value 
obtains  in  present  competitive  catch  and  grab 
society,  than  would  be  occasioned  by  equality  of 
compensation  for  work  of  standard  efficiency; 
and  what  slight  deviation  from  exact  adjustm.enc 
in  these  matters  there  would  remain,  that  should 
be  accepted  on  the  principle  of  "bear  ye  one 
another's  burdens."  We  cannot  in  any  event 
escape  a  certain  measure  of  bearing  another's 
burdens  even  now.  Two  men  buy  clothes  at  the 
same  time,  of  the  same  quality,  in  the  same  store, 
and  pay  the  same  price,  though  one,  being  large, 
may  require  10  to  20  per  cent,  more  goods  in  his 
suit  than  the  other  who  is  small.  The  same  with 
shoes  or  anything  else  in  the  way  of  clothing  or 
wear.     A  hearty  eater  pays  no  more  for  a  meal 


82  EQUAL  VALUE  AND  COMPENSATION 

in  a  hotel  or  restaurant  than  the  man  with  a 
small  appetite.  The  100-pound  man  pays  the  same 
fare  on  car  or  train  as  the  200-pound  man;  and 
on  street  cars  long  and  short  trips  are  gaid  alike. 
Similarly  with  postage.  In  these  matters  it  is 
simply  impossible  to  make  calculations  to  a  min- 
ute fraction  of  a  cent  and  charge  accordingly; 
such  things  must  be  averaged  within  reasonable 
limits,  and  so  should  be  the  compensation  for 
standard  labor.  This  is  necessary  in  order  to 
stabilize  society,  bring  order  out  of  economic 
chaos,  secure  industrial  peace,  and  establish  real 
brotherhood  among  men. 

Some  mechanics  may  still  insist  that  their  par- 
ticular trade  requires  unusual  skill,  and  a  long 
apprenticeship  to  acquire  the  same.  Such  no- 
tions are  now  obsolete,  whatever  reasonable 
grounds  there  may  have  been  for  them  in  days 
past.  With  vocational  training,  manual  and  tech- 
nical schools,  and  the  greater  mental  alertness  of 
modern  young  people,  with  the  general  all-around 
increase  of  intelligence,  and  with  the  increasing 
sub-division  of  labor,  the  days  of  long  apprentice- 
ship are  gone.  Two  years  will  probably  be  the 
limit,  and  in  many  trades  it  might  be  less.  The 
arbitrary  lengthening  of  time  for,  and  curtailment 
of  numbers  of  apprentices  in  order  artificially  to 
create  a  scarcity  of  members,  and  thereby  boost 
the  compensation  in  any  trade,  will  not  be 
countenanced  when  order,  system,  and  regula- 
tion take  the  place  of  disorder  and  arbitrary 
forcing;  when  the  labor  of  the  nation  is  organ- 
ized for  production,  instead  of  for  defense  in  the 
economic  struggle  for  livelihood. 


FOR  ALL  KINDS  OF  SKILLED  LABOR.  83 

I  hope  every  fairminded  reader  of  these  lines 
will  agree  that  the  ditterent  trades  should  receive 
the  same  compensation,  because  all  are  useful 
and  necessary  or  indispensable.  But  whose 
labor  is  more  useful  and  more  indispensable  than 
that  of  the  farmer,  the  tiller  of  the  soil?  It  is 
he  upon  whom  all  depend  for  food,  at  least  for 
the  raw  material,  both  of  food  and  of  clothing. 
He  is  the  peer  of  any  in  point  of  usefulness;  to 
him  really  belongs  the  place  of  honor  as  the 
most  indispensable  of  all  workers.  He  furnishes 
much  food  ready  for  consumption,  and  the  raw 
materials  for  most  of  the  staple  food  products, 
as  well  as  the  raw  material  for  textiles  and  a 
variety  of  minor  items  in  the  list  of  raw  mate- 
rials. This  man's  work  certainly  is  entitled  to 
the  same  value  estimate,  and  therefore  to  the 
same  compensation  as  any  of  the  skilled  trades. 
The  same  reasoning  applies  to  the  coal  miner,  the 
man  whose  work  probably  is  the  most  burden- 
some, as  well  as  the  most  dangerous.  Civiliza- 
tion as  it  is  known  today  would  be  impossible 
without  a  plentiful  supply  of  fuel;  and  of  fuels, 
coal  is  the  principal  source,  and  for  many  pur- 
poses the  most  suitable  kind.  The  value  of  the 
coal  miner's  work  cannot  in  reason  and  fairness 
be  estimated  at  any  lower  rate  than  that  of  other 
industrial  workers.  Clearly,  this  miner  must  be 
accorded  a  place  in  the  equal  compensation 
scheme.  So  also  the  miner  of  zinc,  lead,  copper, 
and  iron  ore.  What  would  the  world  be  without 
iron  and  steel?  Civilization  could  simply  not 
exist  without  iron.  All  tools  and  all  machinery 
of  production,  as  well  as  of  transportation,  de- 


84  EQUAL  VALUE  AND  COMPENSATION 

pend  upon  iron.  Hence  we  find  the  work  of  the 
iron  miner  and  smelter  as  indispensable,  as  use- 
ful, and  as  worthy  of  esteem  as  any  other  of  the 
skilled  trades,  and  fully  entitled  to  equal  compen- 
sation with  the  rest. 

But  the  products  of  the  farm  and  the  mines  as 
well  as  the  multitudinous  manufactured  goods 
must  be  transported  in  order  to  reach  the  place 
of  consumption,  the  place  of  realized  utility.  And 
this  calls  for  the  work  of  a  large  number  of  men 
laboring  in  transportation  by  land  and  by  water : 
teamsters,  wagoners,  sailors,  railroaders,  etc.  Any 
person  of  but  ordinary  intelligence  will  realize  at 
once  that  the  transport  worker  is  as  needful  for 
the  existence  of  organized  society  as  is  the  more 
direct  producer  of  the  goods  transported;  and 
it  should  not  be  necessary  to  dwell  upon  this  at 
any  length.  Division  of  labor  is  a  fact,  based 
upon  this  other  fact,  that  division  and  subdi- 
vision of  labor  increases  the  productive  power  of 
labor  manifold;  and  also  based  upon  this  further 
fact,  that  the  various  raw  materials  which  enter 
into  one  article  of  manufacture  often  have  to  be 
brought  together  from  widely  separated  localities. 
The  staple  food  materials,  raised  almost  wholly 
in  the  country,  must  be  transported  to  cities  and 
manufacturing  centres ;  and  much  of  it  is  carried 
back  again  to  the  country,  after  it  has  passed 
through  the  various  processes  of  manufacture. 
All  this,  or  at  least  a  great  amount  of  transpor- 
tation, is  unavoidable  and  indispensable,  and  this 
of  course  implies  that  the  labor  of  the  transport 
worker  is  indispensable,  or,  to  say  the  least,  is 
useful   and   necessary,   and   therefore   of   equal 


FOR  ALL  KINDS  OF  SKILLED  LABOR.  85 

value  and  worth  with  other  useful  and  necessary 
work,  and  hence  is  entitled  to  a  place  in  the  equal 
compensation  scheme.  What  has  here  been  said 
about  the  worker  in  transportation,  applies  with 
equal  force  to  all  those  who  work  in  stores  and 
warehouses,  in  wholesale  and  retail  mercantile 
work,  the  merchant  class,  and  all  their  help,  in 
office,  storeroom,  and  salesroom ;  everyone  whose 
labor  in  any  way  serves  the  process  of  distribu- 
tion, the  connecting  of  producer  with  the  con- 
sumer. All  this  work  is  likewise  indispensable, 
necessary,  useful,  and  therefore  entitled  to  the 
same  value  estimate  as  other  work;  and  the  per- 
sons engaged  therein  have  an  undeniable  right 
to  a  place  in  the  equal  compensation  scheme  with 
the  rest  of  useful  workers. 

That  the  immense  army  of  workers,  in  their 
multifarious  variety  of  work,  on  field  and  farm, 
in  mine,  mill,  and  workshop,  on  railroad,  ship,  or 
wagon,  in  store  and  office,  the  producers  and  dis- 
tributors of  material  wealth,  of  all  the  necessaries 
and  comforts  of  life,  that  these  are  all  alike 
needed,  all  alike  useful  and  important,  that  seems 
to  me  so  clear,  that  even  a  child  might  under- 
stand it;  and  that  therefore,  in  reason  and  con- 
science, they  should  be  esteemed  equally  worthy 
and  valuable,  and  entitled  to  equal  compensation, 
hour  for  hour,  when  arrived  at  standard  effi- 
ciency, that  seems  to  me  equally  clear.  Moreover, 
let  it  be  remembered  that  this  multitude  of  work- 
ers, the  producers  of  wealth,  that  these  also  con- 
stitute the  bulk  of  consumers,  and  as  such  furnish 
employment  for  each  other;  and  since  the  pur- 
chase of  products  is  really  an  exchange  of  prod- 


86  EQUAL  VALUE  AND  COMPENSATION 

ucts,  and  in  the  final  analysis  an  exchange  of 
labor,  therefore  equal  pay  hour  for  hour  really 
means  an  exchange  of  labor  with  your  brother 
man  on  the  basis  of  hour  for  hour,  on  the  basis 
of  giving  one  hour  of  your  work  for  one  hour  of 
his.  Let  it  furthermore  be  remembered  that  this 
equal  compensation,  hour  for  hour,  for  all  use- 
full  productive  work,  gives  us  a  rational  and  equi- 
table basis  of  value,  a  means  of  determining  the 
value  of  all  material  products  according  to  the 
hours  of  standard  labor  embodied  therein;  and 
that  this  will  settle,  at  once  and  for  good,  all  dis- 
putes about  rates  of  pay,  eliminate  strikes  and 
lockouts,  and  stifle  in  men  generally  the  desire 
to  exploit  their  fellowmen;  will  bring  industrial 
peace,  and  will  do  more  than  aught  else  to  estab- 
lish lasting  peace  between  the  nations  of  this 
earth.  Who  is  there  so  narrowly  selfish,  and  so 
shortsighted,  as  to  refuse  welcome  to  such  a  gos- 
pel of  industrial  peace,  of  harmony,  and  brother- 
hood, of  salvation  from  economic  chaos? 

The  demand  for  equality  of  pay  for  equal  work 
regardless  of  sex  is  already  quite  common,  and  is 
generally  accepted  as  reasonable  and  just.  Why 
not  also  equality  of  pay  regardless  of  trade  or 
line  of  work?  If  it  is  right  to  place  men  and 
women  upon  equality  in  the  matter  of  compen- 
sation, why  not  men  and  men  ?  When  it  becomes 
clear,  that  rightly  understood,  men's  work,  in 
point  of  value,  is  equal  when  of  standard  effi- 
ciency, no  matter  in  what  particular  line  of  pro- 
ductive activity,  who  then  can  any  longer  oppose 
this  idea  of  equal  compensation  ? 


Chapter  VI. 

Equal   Value   of    Skilled    and    Unskilled 

Labor. 

I  have  not  yet  discussed  the  status  of  so-called 
unskilled  labor;  and  I  know  full  well  that  the 
attempt  to  include  this  class  of  labor  in  the  scheme 
of  equal  compensation  will  meet  the  most  emphatic 
objection  from  the  great  majority  of  skilled  work- 
ers, those  immediately  above  the  unskilled  in 
economic  standing  and  income.  This  exempli- 
fies a  universal  human  weakness  and  defect  of 
character.  Men  are  quite  anxious  to  see  justice 
done  as  long  as  it  imposes  no  sacrifice  upon  them- 
selves, takes  from  themselves  no  cherished  pre- 
rogative or  accustomed  advantage.  When  that 
is  threatened,  then  the  whole  matter  assumes  a 
different  aspect;  men  become  totally  blind  to  jus- 
tice, or  it  becomes  so  vague  and  remote  a  thing  as 
to  be  lost  to  sight  and  to  consciousness,  while  the 
threatened  privilege  assumes  large  proportions, 
and  seems  so  sacred  and  important,  that  to  touch 
it  appears  to  them  as  the  grossest  injustice,  and 
calls  for  bitter  resentment.  But  such  is  this  poor 
humanity,  and  so  backward  is  it  still,  in  its  age- 
long struggle  to  evolve  from  a  status  like  unto  a 
predatory  animal  toward  that  of  a  really  human 
being,  brotherly  and  helpful,  that,  as  yet,  man  is 
not  quite  willing  to  grant  to  those  he  looks  upon 
as  standing  below  him  the  same  consideration, 
and  the  same  rights,  that  he  so  vociferously  claims 
for  himself.     The  middle  class,  having  gained 

87 


88  EQUAL  VALUE  OF  SKILLED 

the  franchise,  were  unwilHng  to  extend  the  same 
to  the  lower  orders;  and  the  males,  generally 
speaking,  having  now  the  right  to  vote,  are  very 
reluctant  about  granting  the  same  right  to  fe- 
males, justifying  that  refusal  upon  some  pretext 
quite  satisfactory  to  themselves,  though  not  so 
convincing  to  the  women.  Stubborn  is  the  innate 
self-considering  disposition  of  man,  and  if  certain 
customs  and  usages  that  have  existed  for  centu- 
ries are  in  accord  with  that  disposition,  it  becomes 
an  almost  hopeless  task  to  combat  the  same.  Such 
is  the  age-long  custom  of  paying  unskilled  labor 
the  meanest  wages,  a  bare,  pitiful,  subsistence 
wage;  and  the  skilled  workers,  accustomed  to 
think  that  perfectly  right  and  proper,  fully  be- 
lieve that  their  own  labor  possesses  double  and 
three-fold  the  value  of  unskilled  labor,  and  also 
double  and  three-fold  value  producing  po- 
tency. This  conviction  has  been  shared  by  all 
the  world,  by  the  educated  classes,  by  scholars 
generally,  and  by  the  teachers  of  political  econ- 
omy, and  even  by  the  victims  of  that  usage,  the 
unskilled  laborers  themselves.  But  the  time  has 
come  for  demonstrating  that  this  is  all  wrong, 
that  this  is  an  utterly  false  notion,  and  that  it  is 
the  very  source  and  spring  of  social  injustice; 
that  it  perpetuates  poverty  and  slums,  puts  man 
at  enmity  with  his  fellow  man,  and  fills  his  heart 
with  the  spirit  of  Cain. 

I  propose  to  show,  and  largely  by  the  aid  of 
accepted  economists,  that  the  prevailing  valua- 
tion of  unskilled  labor  is  false,  is  based  on 
failure  to  understand  labor  sacrifice;  that  it  is 
an  inherited  after-eflFect  of  ancient  and  medieval 


AND  UNSKILLED  LABOR.  89 

slavery;  that  even  under  the  present  economic 
regime,  and  under  the  sanction  of  conventional 
economic  principles,  this  false  valuation  of  un- 
skilled labor  is  doomed  to  pass  away;  that  even 
now  a  distinct  tendency  toward  equalization  of 
pay  can  be  discerned;  that  under  the  influence 
of  increasing  general  and  vocational  education, 
and  under  the  organizing  tendency  of  the  present 
time,  this  fifth  and  last  "estate,"  the  unskilled  la- 
borers, this  sub-proletariat,  will  demand  redress 
for  its  age-long  subjection  and  despoilment;  and 
that  this  demand  may  be  attended  with  more  or 
less  violence,  if  it  is  not  met  in  a  proper  and  con- 
ciliatory manner  by  the  other  elements  of  human 
society. 

I  shall  take  up  these  propositions  one  by  one, 
in  the  order  as  stated  above,  beginning  with  the 
assertion  that  the  prevailing  value  estimate  put 
upon  unskilled  labor  is  a  false  one,  due  to  a  fail- 
ure properly  to  apprehend  the  meaning  and  sig- 
nificance of  what  economists  have  called  labor 
sacrifice  or  labor  pain.  Turning  to  Adam  Smith, 
the  father  of  political  economy,  let  us  see  what  he 
says  on  the  subject  in  Wealth  of  Nations,  Book 
I,  chap.  V: 

"Labor  is  the  real  measure  of  the  exchange 
value  of  all  commodities.  The  real  price  of  every- 
thing; what  everything  really  costs  the  man  who 
wants  to  acquire  it  is  the  toil  and  trouble  of  ac- 
quiring it.  What  everything  is  really  worth  to 
the  man  who  has  acquired  it,  and  who  wants  to 
dispose  of  it.  or  exchange  it  for  something  else, 
is  the  toil  and  trouble  which  it  can  save  himself, 
and  which  it  can  impose  upon  other  people.  What 


90  EQUAL  VALUE  OF  SKILLED 

is  bought  with  money  or  with  goods,  is  purchased 
by  labor  as  much  as  what  we  acquire  by  the  toil 
of  our  own  body.  That  money  or  those  goods 
indeed  save  us  this  toil.  Labor  was  the  first  price, 
the  original  purchase  money  that  was  paid  for 
all  things."     (p.  26.) 

"Equal  quantities  of  labor,  at  all  times  and  at 
all  places,  may  be  said  to  be  of  equal  value  to  the 
laborer.  In  his  ordinary  state  of  health,  strength 
and  spirits;  in  the  ordinary  degree  of  his  skill 
and  dexterity,  he  must  always  lay  down  the  same 
portion  of  his  ease,  his  liberty  and  his  happiness." 
(p.  28.)     _ 

This  laying  down  by  the  laborer  of  his  ease, 
his  liberty  and  his  happiness,  has  by  later  econo- 
mists been  called  labor  pain  or  labor  sacrifice; 
and  this  Adam  Smith  declares  is  always  of  equal 
value  to  him  who  makes  this  sacrifice;  and  also 
to  him  who  escapes  this  sacrifice  by  having 
others  make  it  for  him. 

Again  quoting  Adam  Smith,  chap.  VI:  'Tf 
among  a  nation  of  hunters,  for  example,  it  usual- 
ly costs  twice  the  labor  to  kill  a  beaver  which  it 
costs  to  kill  a  deer,  one  beaver  should  naturally 
exchange  for,  or  be  worth  two  deer.  It  is  natural 
that  what  is  usually  the  produce  of  two  days' 
or  two  hours'  labor,  should  be  worth  double  of 
what  is  the  product  of  one  day's  or  one  hour's 
labor."     (p.  41.) 

"In  this  state  of  things  the  whole  produce  of 
labor  belongs  to  the  laborer,  and  the  quantity  of 
labor  commonly  employed  in  acquiring  or  pro- 
ducing any  commodity  is  the  only  circumstance 
which  can  regulate  the  quantity  of  labor  which  it 


AND  UNSKILLED  LABOR.  91 

ought  commonly  to  purchase,  command,  or  ex- 
change for."    (p.  42.) 

Condensing  the  above  statement  it  comes  to 
this:  The  quantity  of  labor  necessary  to  pro- 
duce any  article  is  the  only  thing  which  can  de- 
termine the  quantity  of  labor  that  such  an  article 
ought  to  exchange  for. 

Henry  C.  Carey,  the  American  economist, 
describing  the  assumed  beginning  of  human 
association,  division  of  labor,  and  exchange  of 
products,  says :  And  these  circumstances  natural- 
ly lead  to  a  system  of  exchanges  in  which  each 
seeks  to  obtain  day's  labor  for  day's  labor  em- 
bodied in  the  article  exchanged.  "The  idea  of 
comparison  is  inseparably  connected  with  that 
of  value.  We  compare  the  commodities  pro- 
duced with  the  labor  of  body  and  mind  given 
for  them.  In  exchange  the  most  obvious  mode 
is  to  give  labor  for  labor ;  and  each  watches  care- 
fully that  he  does  not  give  more  than  is  given  in 
return." 

"Having  made  a  crude  axe,  there  is  an  imme- 
diate change  in  the  value  of  fuel  previously  pro- 
duced, because  it  can  now  be  produced  with  less 
labor;  but  the  value  of  things  not  produced  by 
the  use  of  the  axe  remains  unchanged,  li  one 
has  surplus  of  fish,  the  other  surplus  of  fuel,  the 
latter  must  now  give  twice  as  much  fuel  in  ex- 
change as  before,  since  the  fuel  is  produced  by 
half  the  labor  efifort."  (Carey's  Social  Science, 
condensed  by  McKean,  pages  83  and  84.) 

F.  von  Wieser,  the  Austrian  economist,  him- 
self an  opponent  of  the  labor  cost  theory  of  value, 
makes  this  statement:     'The  opponents  of  the 


92  EQUAL  VALUE  OF  SKILLED 

labor  cost  theory  of  value  do  not  in  my  opinion 
do  it  justice.  They  try  to  disprove  it  completely, 
whereas  it  is  by  no  means  entirely  false.  It  is 
conceivable,  but  does  not  fit  in  with  facts;  it  is 
philosophically  true,  but  not  realized  in  practice. 
It  is  possible  to  conceive  a  condition  of  economic 
life,  under  which  the  single  consideration  of  the 
sacrifice  involved  in  labor  would  determine  the 
value  both  of  the  labor  itself  and  of  all  products.'' 
(Natural  Value,  translated  by  C.  A.  Malloch,  p. 
194.) 

Francis  Wayland,  an  American  university 
president  and  professor,  makes  this  statement: 
"No  man  would  exchange  what  has  cost  him  two 
days'  labor  for  that  which  has  cost  another  of 
the  same  skill  but  one  day's  labor.  Thus  if  a 
hundred  pounds  of  fish  could  be  procured  by 
one  day's  labor,  and  only  twenty-five  pounds  of 
venison,  men  would  exchange,  not  pound  for 
pound,  but  labor  for  labor,  that  is,  at  the  rate 
of  four  pounds  of  fish  for  one  pound  of  venison. 
The  amount  of  labor  expended  in  the  creation 
of  value  is  commonly  called  its  cost.  This  is  al- 
ways the  standard  by  which  for  long  periods  the 
degree  of  exchangeable  value  is  estimated." 
(Elements  of  Political  Economy,  p.  20.) 

John  Stuart  Mill  says :  "Labor  is  either  bodily, 
or  mental,  muscular  or  nervous;  and  this  idea 
includes,  besides  the  exertion  itself,  all  feelings 
of  a  disagreeable  kind,  all  bodily  inconvenience 
or  mental  annoyance  caused  by  the  employment 
of  muscles  or  thought  in  a  particular  occupation." 
(Principles,  Book  I,  chap.  I,  p.  45.) 

Professor  Davenport,  in  his  Value  and  Dis- 


AND  UNSKILLED  LABOR.  93 

tribution,  p.  62,  quotes  Cairns,  and  says  of  him: 
Cairns'  special  task  was  the  rehabiHtation  of  the 
labor  cost  theory  of  value,  after  the  damage  vis- 
ited upon  it  by  Mill's  half-hearted  support  or  par- 
tial abandonment.  In  his  (Cairns')  Leading 
Principles  Restated,  labor  is  set  up  as  the  value 
determinant;  however  not  in  terms  of  time  but 
in  terms  of  pain,  burden,  irksomeness.  "Cost 
means  sacrifice,  and  the  problem  of  cost  of  pro- 
duction, as  bearing  on  value,  is  to  ascertain  how 
far,  and  in  what  way,  the  payment  thus  made 
by  man  in  the  barter  between  him  and  nature 
determines  the  exchange  value  of  the  products 
which  result."     (Chap.  Ill,  Sec.  5.) 

On  page  69,  Davenport  says :  ''Ricardo  had  as- 
sumed without  argument  that  as  a  general  propo- 
sition, and  in  broad  averages,  wages  are  paid 
in  proportion  to  the  painfulness  of  employment; 
and  he  again  quotes  Cairns  to  this  eifect:  "If 
wages  really  stood  in  any  constant  relation  to  that 
which  really  constitutes  the  laborers'  cost,  then 
wages  in  all  occupations  and  in  all  countries  and 
at  all  times  would  be  in  proportion  to  the  toil 
which  the  wages  compensated." 

Professor  J.  L.  Laughlin,  formerly  of  Har- 
vard, makes  these  statements:  "The  capitalist 
undergoes  sacrifice  of  abstinence,  and  the  labor- 
ers' exertion  or  expenditure  of  physical  or  mental 
energy  is  sacrifice  to  him."  (p.  112.)  "By  con- 
sidering 'cost'  as  sacrifice  we  give  due  importance 
to  the  sacrifice  of  the  laborer  as  well  as  to  that 
of  the  capitalist."  (p.  113.)  "Where  competition 
is  free,  commodities  exchange  for  each  other  in 
proportion  to  their  'cost'  or  'sacrifice'  of  produc- 


94  EQUAL  VALUE  OF  SKILLED 

tion.  That  is  the  law  of  normal  value  of  manu- 
factured goods."  (p.  117  Elements  of  Politi- 
cal Economy,  Appleton  edition,  1888.) 

I  also  quote  John  Ruskin  who,  though  not 
classed  as  an  economist,  was  a  philosopher  and 
stands  high  among  English  men  of  letters.  He 
says  in  Munera  Pulveris,  pp.  59  and  60:  "All 
cost  and  price  are  counted  in  labor;  we  must 
know  therefore  first  what  is  to  be  counted  as 
labor.  Labor  is  the  suffering  in  effort.  The 
cost  of  anything  is  the  quantity  of  labor  neces- 
sary to  obtain  it.  Quantity  of  labor  is  expressed 
by  the  time  it  lasts ;  so  that  the  unit  of  labor  is  an 
hour's  work,  or  a  day's  work." 

Here  then  is  a  list  of  writers,  which  probably 
could  be  extended  to  a  wearisome  length,  seven 
of  them  accepting  Adam  Smith's  conception  of 
labor  sacrifice,  or  labor  pain,  as  the  ultimate  es- 
sence of  value,  and  the  original  purchase  price 
of  every  labor  product,  of  every  commodity,  of 
every  service  and  of  every  article  of  exchange ;  a 
sacrifice  which  in  sound  logic  must  be  accepted  as 
equivalent,  man  for  man,  hour  against  hour,  day 
for  day.  All  of  these  writers  no  doubt  intuitively 
recognized  the  truth  and  the  justice  of  such  a 
conception,  but  all  of  them  quickly  discarded  this 
conception,  and  reasoned  themselves  away  from 
this  truth,  because  on  second  thought  they  could 
not  make  it  fit  into  the  actuality  of  the  human 
life  of  their  day.  It  did  not  fit,  and  could  not  be 
made  to  fit  into  a  societary  life  and  system  based 
on  force  'and  fraud,  on  oppression  and  over- 
reaching and  the  never-ending  effort  on  the  part 
of  the  stronger  and  more  cunning  to  despoil  the 


AND  UNSKILLED  LABOR.  9S 

weaker,  with  the  crafty  and  alert  ever  aiming 
to  cHmb  upon  the  shoulders  of  the  "man  with 
the  hoe,"  putting  upon  his  back  a  four-fold  share 
of  the  world's  labor  pain,  "the  burden  of  the 
world." 

In  the  days  of  Adam  Smith  it  would  have  been 
absolutely  futile  to  follow  up  the  labor  sacrifice 
theory  to  its  logically  final  conclusion,  and  to 
attempt  its  application  as  I  propose  to  do  now. 
Perhaps  there  were  men  in  Smith's  day,  and 
prior  to  him,  who  did  try  to  do  this.  If  so,  they 
have  been  securely  buried  in  oblivion.  Smith 
wisely  gave  the  world  but  a  glimpse  of  this  truth, 
and  then  hastily  turned  ofif  the  light.  Whether 
he  did  so  consciously  and  on  purpose  I  do  not 
know,  nor  does  it  matter.  Let  us  remember  that 
he  wrote  his  Wealth  of  Nations  in  the  years  from 
1767  to  1776,  before  the  American  Declaration 
of  Independence  was  proclaimed,  and  twenty 
years  before  the  French  Revolution;  at  a  time 
when  serfdom  and  semi-bondage  still  were  com- 
mon throughout  Europe,  especially  for  agricul- 
tural laborers;  when  slave  hunting  and  slave 
trade  were  still  carried  on,  and  when  actual  chat- 
tel slavery  was  a  recognized  institution  in  English 
colonies  and  in  the  United  States,  and  so  re- 
mained for  nearly  another  hundred  years.  At 
such  a  time,  and  under  such  circumstances,  it 
would  have  been  sheer  folly  to  talk  about  equal- 
ity of  compensation  for  all  kinds  of  useful  work, 
including  the  work  of  the  unskilled  laborer. 

This  is  not  the  place  for  any  lengthy  disser- 
tation upon  the  age-long  story  of  the  enslave- 
ment of  man  by  man,  the  weaker  by  the  stronger. 


96  EQUAL  VALUE  OF  SKILLED 

Someone  has  said  that  the  history  of  the  human 
race  is  Httle  else  than  a  record  of  the  efforts  of 
the  powerful  few  to  tax  the  many,  and  the  strug- 
gle of  the  many  to  escape  such  taxation.  H.  C. 
Gary  (p.  170)  puts  it  this  way:  "The  history 
of  the  world  is  little  more  than  a  record  of  the 
efforts  of  the  powerful  few  to  interfere  with  the 
labor  of  the  many  and  thus  to  enslave  them." 
And  we  may  now  express  the  same  thought  in 
this  way :  The  history  of  the  zvorld  is  little  else 
than  a  record  of  the  efforts  of  the  shrewd  and 
strong  to  unload  upon  the  shoulders  of  those  he- 
low  them  an  undue  amount  of  that  labor  pain 
which  must  he  borne  by  man  if  the  race  is  to  live 
in  a  condition  of  comfort  and  security  of  sub- 
sistence. When  Adam  Smith  formulated  his  eco- 
nomics the  American  Declaration  of  Inde- 
pendence had  not  yet  been  written;  nor  had  the 
French  Revolution  promulgated  its  doctrine  of 
liberty,  equality,  and  fraternity;  and  prior  to  that 
there  was  no  claim  made  to  any  belief  in  a  uni- 
versal brotherhood  of  man ;  and  as  far  as  known, 
no  one  conceived  the  idea  of  an  equitable  appor- 
tionment of  the  world's  labor  pain.  But  our  age 
makes  great  pretense  of  equality  and  of  brother- 
hood, and  it  is  high  time  to  substantiate  that 
equality  and  brotherhood  by  an  equitable  and 
brotherlike  apportionment  to  all  men  of  this 
world's  labor  pain,  so  that  no  one  shall  carry  a 
double  or  a  four-fold  share,  while  others  escape 
the  carrying  of  any,  or  merely  carry  a  spurious, 
a  make-believe  load. 

Political     democracy,     approximate     political 
equality  of  men,  has  been  achieved  since  Adam 


AND  UNSKILLED  LABOR.  97 

Smith's  time;  but  political  equality  proves  a  bar- 
ren husk  if  it  does  not  lead  to  industrial  equal- 
ity and  social  democracy;  and  this  again  is  mean- 
ingless unless  it  means  an  equitable  distribution 
to  all,  of  the  labor  pain  and  sacrifice  imposed 
by  nature  herself  upon  all  life,  including  man- 
kind. In  other  words,  everyone  should  carry  his 
proper  share,  and,  generally  speaking,  that  means 
an  equal  share  of  the  world's  labor  pain.  This, 
and  nothing  short  of  this,  constitutes  industrial 
democracy,  industrial  equality,  and  industrial 
justice.  And  this  can  be  effected  only  in  one 
way;  not  by  compelling  everyone  to  work  a  cer- 
tain number  of  hours  every  day,  no,  but  by  put- 
ting an  equal  value  estimate  upon  the  labor  pain, 
hour  for  hour,  of  every  man  who  performs  useful 
zvork  of  standard  efficiency  in  any  calling  what- 
ever, skilled  or  unskilled.  Nothing  less  than 
this  constitutes  genuine  democracy,  nothing  less 
than  this  constitutes  true  equality,  nothing  but 
this  can  put  real  meaning  and  sense  into  the 
words  human  brotherhood. 

It  is  to  be  hoped  that  men  in  the  foremost 
countries  of  civilization  have  now  so  developed 
a  sense  for  equal  rights  and  for  brotherhood, 
and  that  they  have  overcome  the  universally  in- 
herited selfish  instincts  in  suflficient  measure  to  be 
willing  to  accord  to  others  a  value  estimate  and 
consideration  for  their  labor  pain,  equal  to  that 
which  they  put  upon  their  own ;  and  that  there- 
fore, in  our  day,  to  get  a  hearing  for  such  a 
gospel  of  brotherly  justice  is  not  utterly  beyond 
hope.  I  do  believe  that  today  men  may  be  able 
to  concede  that  the  pain  in  Smith's  back  and 


98  EQUAI.  VALUE  OF  SKILLED 

muscles  is  entitled  to  the  same  consideration  as 
is  the  pain  in  Jones'  back  and  muscles;  that  the 
labor  pain  endured  by  Jim,  and  Tom,  and  Smith 
are  all  entitled  to  the  same  consideration  and 
valuation,  though  Jim  wields  pick  and  shovel, 
Tom  wields  hammer  and  saw,  and  Smith  uses 
pen  or  pencil.  If  Jim,  the  laborer,  digs  a  trench 
in  which  Jones,  the  plumber,  is  to  lay  a  pipe,  Jim 
will  endure  greater  labor  pain  and  have  sorer 
back  and  muscles  after  eight  hours  of  steady 
work,  and  be  far  more  exhausted  and  fagged 
out,  than  Jones  will  be  after  laying  pipe  the 
same  length  of  time.  And  without  the  trench 
being  dug,  Jones  could  not  lay  in  it  any  pipe;  if 
he  could  not  have  gotten  someone  to  dig  the 
trench  for  him,  he  would  have  had  to  do  it  him- 
self, and  he  would  have  had  to  endure  that 
greater  labor  pain  which  now  he  shifts  onto  Jim. 

Let  us  recall  what  Adam  Smith  and  his  fol- 
lowers said:  Labor,  the  toil  and  trouble  of  pro- 
ducing, is  the  original  purchase  price  that  was 
paid  for  all  things ;  and  equal  quantities  of  labor 
may  be  said  to  be  of  equal  value  to  the  laborer, 
since  he  must  lay  down  equal  sacrifices  of  ease, 
liberty,  and  comfort.  The  value  of  any  product 
or  of  any  industrial  service  rendered  should  be 
estimated  according  to  the  duration  and  intensity 
of  the  labor  pain  endured  in  producing  such 
article  or  rendering  such  service. 

And  we,  the  privileged  gentry  of  the  skilled 
crafts  and  the  so-called  genteel  occupations,  let 
us,  Lsay,  fully  realize,  and  keep  vividly  in  mind, 
that  the  greater  labor  pain,  the  greater  burden 
of  irksomeness  and  fatigue,  usually  endured  by 


AND  UNSKILLED  LABOR.  99 

the  unskilled  laborers,  is  by  them  lifted  from 
our  shoulders;  that  we  ourselves  should  have  to 
do  this  work  and  endure  this  greater  hardship 
ourselves,  if  it  were  not  borne  by  those  others. 
And  let  us  further  remember  that  this  rougher 
work  of  unskilled  and  half-skilled  labor,  the 
hewing  of  wood  and  carrying  of  water,  the 
sweeping,  cleaning,  and  digging;  the  plowing 
and  reaping;  that  all  this  rough  work  is,  gen- 
erally speaking,  indispensable  and  necessary, 
while  much  of  the  finer  work  is  rather  unes- 
sential. Let  us  then  hasten  to  accord  to  these 
workers  equal  value  and  equal  pay,  and  con- 
sider ourselves  fortunate  if  they  do  not  some  day 
turn  the  tables  on  us,  and  by  weight  of  their 
numbers  force  upon  us  and  our  services  the  in- 
ferior valuation. 

But  some  readers  may  still  resist  this  reason- 
ing and  cling  to  the  notion  that  acquired  skill 
implies  a  labor  pain  of  training  and  a  sacrifice 
of  time  and  money,  and  on  that  ground  entitles 
the  possessor  of  this  skill  to  a  correspondingly 
higher  compensation.  They  may  not  be  able  to 
get  it  out  of  their  heads  that  nimbleness  of  wit 
and  dexterity  of  hand  impart  to  things  cun- 
ningly wrought  a  superior  virtue  and  value,  be- 
cause that  opinion  has  been  so  long  and  so  uni- 
versally accepted.  Nor  can  they  get  it  into  their 
heads  that  this  is  not  the  final  and  crucial  test 
of  value,  but  that  the  real  test  of  value  is  this: 
How  much  toil  and  trouble,  hozv  severe  a  labor 
pain,  and  how  many  hours  of  same,  is  involved 
in  this  thing  or  that  service;  how  much  labor 
pain  has  the  producer  put  into  this  ,and  does  he 


100  EQUAL  VALUE  OF  SKILLED 

save  me  if  I  acquire  this  thing  from  him  by  pur- 
chase or  exchange;  that  every  fair  and  equitable 
exchange  should  be  an  exchange  of  equal 
amounts  of  labor  pain  or  sacrifice.  This  idea 
it  will  be  as  hard  to  get  into  the  heads  as  it  will 
be  to  get  the  other  idea  out,  because  it  has  never 
been  clearly  and  adequately  presented,  at  least 
not  as  far  as  general  knowledge  is  aware. 

However,  let  us  briefly  examine  the  claims 
advanced  on  behalf  of  skilled  labor  as  against 
unskilled,  both  as  to  historical  origin,  and  as  to 
present  justification.  And  the  first  question  I 
would  ask  is  whence  comes  this  unskilled  labor? 
Undeniably  a  large  part  is  engendered  in  the 
cities,  both  large  and  small.  Boys  and  young 
men  coming  from  illy  regulated  homes,  or  from 
homes  oppressed  by  poverty,  where  the  boys  at 
an  early  age  are  sent  out  as  bootblacks,  news  or 
errand  boys,  or  in  similar  ways  to  help  earn  the 
family  subsistence;  and  these  boys  neither  have 
the  chance  for  a  full  school  education,  nor  the 
chance  to  learn  a  skilled  trade.  Let  us  grant 
that  some  are  born  with  a  roving,  shiftless  dis- 
position, and  some  perhaps  with  a  low  grade  of 
mentality.  And  incidentally,  dear  reader,  let  me 
remind  you  that  to  be  so  born  is  not  the  deliber- 
ate choice  of  these  individuals  but  their  misfor- 
tune, an  accident  of  birth.  But  the  most  prolific 
source  of  unskilled  labor  is  the  surplus  country 
population,  which  is  ever  drifting  to  the  cities. 
These  people  mainly  make  up  the  great  army  of 
pick  and  shovel  men,  employed  in  street  and 
sewer  construction  work,  in  excavations,  and  as 
yard   laborers   and   helpers   in   large   industrial 


AND  UNSKILLED  LABOR.  loi 

plants,  freight  handlers,  teamsters  and  stable- 
men, etc.  And  ruling  custom  assigns  to  this 
class  of  labor  a  wage  similar  to  that  paid  for 
labor  help  on  the  farm.  While  many  of  these 
laborers  are  recent  immigrants,  such  are  like- 
wise for  the  greater  part  excess  country  people, 
and  they  bring  with  them  an  exceedingly  low 
standard  of  living,  habits  of  submission,  and 
acceptance  of  low  living  conditions;  and  the  in- 
flux of  great  numbers  of  these  people  constantly 
renews  a  depressive  influence  upon  the  economic 
condition  of  unskilled  labor  and  farm  help,  since 
they  carry  with  them  their  inherited  historical 
and  economic  status. 

Adam  Smith  in  his  Wealth  of  Nations,  Book 
I.  and  Book  III.,  gives  an  exceedingly  interesting 
explanation  of  how  it  came  that  agricultural 
labor  in  Europe  was  far  more  illy  paid  than  the 
mechanics  and  artisans  of  the  towns.  His 
account  of  the  circumstances  which  brought  this 
about  is  too  lengthy  to  be  here  reproduced  with 
any  degree  of  fullness,  and  I  can  only  present 
some  condensed  passages: 

"In  the  ancient  state  of  Europe  the  occupiers 
of  land  were  all  tenants  at  will.  They  were  all 
or  almost  all  slaves;  but  their  slavery  was  of 
a  milder  kind  than  that  known  to  the  ancient 
Greeks  or  Romans,  or  even  in  our  West  Jndian 
colonies.  They  were  supposed  to  belong  more 
directly  to  the  land  than  to  their  master.  They 
could  be  sold  with  the  land  but  not  separately. 
They  could  marry,  with  the  consent  of  the  mas- 
ter, but  he  could  not  afterwards  dissolve  the 
marriage  by  selling  the  man  and  wife  to  differ- 


102  EQUAL  VALUE  OF  SKILLED 

ent  persons.  If  he  maimed  or  murdered  any  of 
them  he  was  Hable  to  some  penalty,  though  us- 
ually a  small  one.  They  could  not  acquire  prop- 
erty; whatever  they  acquired  was  acquired  to 
the  master,  and  he  could  take  it  away  from  them 
at  pleasure.  It  was  properly  speaking  the  master 
who  occupied  his  own  lands  and  cultivated  them 
by  his  bondsmen.  This  species  of  slavery  still 
exists  (1775)  in  Russia,  Poland,  Hungary,  Bo- 
hemia, Moravia,  and  other  parts  of  Germany. 
It  is  only  in  the  western  and  southwestern  parts 
of  Europe  that  it  has  gradually  been  abolished." 
(Book  III,  chapter  2,  p.  344.) 

**The  inhabitants  of  cities  and  towns  were, 
after  the  fall  of  the  Roman  empire,  not  more 
favored  than  those  of  the  country.  The  privi- 
leges which  we  find  granted  by  ancient  charters 
to  the  inhabitants  of  some  of  the  principal  towns 
in  Europe  sufficiently  show  what  their  condition 
must  have  been  before  these  grants.  People  to 
whom  is  granted  a  privilege  that  they  might  give 
their  own  daughters  in  marriage  without  the 
consent  of  their  lord;  that  upon  their  death  their 
own  children  and  not  the  lord  should  succeed  to 
their  goods,  and  that  they  might  dispose  of  their 
effects  by  will,  must  before  these  grants  have 
been  nearly  in  the  same  state  of  villainage  with 
the  occupiers  of  the  land  in  the  country.  But 
how  servile  soever  may  have  been  originally  the 
condition  of  the  inhabitants  of  towns,  it  appears 
evidently  that  they  arrived  at  liberty  and  inde- 
pendency much  earlier  than  the  occupiers  of 
land  in  the  country."  (Book  III,  chapter  3,  pp. 
352-3.) 


AND  UNSKILLED  LABOR.  103 

Adam  Smith  explains  tliis  at  considerable 
length  by  the  strife  between  the  barons,  or  lords, 
and  their  kings,  in  which  the  kings  usually 
sought  the  help  of  the  towns,  granting  them 
many  privileges,  among  which  were  the  rights  to 
fortify  the  towns,  keep  armed  forces,  have  their 
own  magistrates  and  ordinances,  and  to  incor- 
porate their  trades  in  guilds.  The  towns  thus 
became  powerful  as  well  as  rich,  could  defy  the 
barons  and  give  protection  against  these  to  their 
citizens.  And  in  Book  I,  chapter  10,  he  tells 
how  the  inhabitants  of  the  towns  made  use  of 
their  better  political  and  social  position  to  take 
advantage  of  the  tiller  of  the  soil  and  to  oppress 
him  pecuniarily  in  their  business  dealings  with 
him;  that  is,  they  over-reached  him  in  the  ex- 
change of  products,  which  as  we  now  under- 
stand is  really  an  exchange  of  labor. 

"The  policy  of  Europe  occasions  a  very  im- 
portant inequality  in  the  advantages  of  different 
employments  by  restraining  competition  in  some 
employments  to  a  smaller  number  than  other- 
wise might  enter  them.  The  exclusive  privileges 
of  incorporated  guilds  are  the  principal  means 
for  this  purpose.  The  exclusive  privilege  of  an 
incorporated  trade  necessarily  restricts  the  com- 
petition in  the  town  where  it  is  established  to 
those  who  are  free  of  the  trade.  *  To  have 
served  an  apprenticeship  in  the  town  under  a 
master  properly  qualified,  is  commonly  the  requi- 
site for  obtaining  this  freedom.  The  by-laws 
of  the  corporation  regulate  sometimes  the  num- 

*  Free  of  the  trade  mears  free  to,  or  permitted  to  practice 
that  trade  or  handicraft. 


104  EQUAL  VALUE  OF  SKILLED 

ber  of  apprentices  which  any  master  is  allowed 
to  have,  and  almost  always  the  number  of  years 
which  the  apprentice  must  serve.  The  intention 
of  both  regulations  is  to  reduce  the  number  of 
competitors  in  such  trade.  In  Sheffield  no  master 
cutler  can  have  more  than  one  apprentice  at  a 
time,  by  a  by-law  of  the  corporation.  In  Nor- 
folk and  Norwich  no  master  weaver  can  have 
more  than  two  apprentices  under  pain  of  forfeit- 
ing five  pounds  a  month  to  the  king."  (Wealth 
of  Nations,  Book  I,  chapter  10,  p.  107.) 

Smith  cites  similar  corporation  by-laws  for 
hatters  and  for  silk-weavers,  some  of  which  he 
says  were  confirmed  by  public  law  of  the  king- 
dom, and  binding  anywhere  in  England  and  Eng- 
lish plantations. 

"By  the  5th  of  Elizabeth,  commonly  called  the 
Statute  of  Apprenticeship,  it  was  enacted  that 
no  person  should  for  the  future  exercise  any 
trade,  craft,  or  mystery,  at  that  time  exercised 
in  England,  unless  he  had  previously  served  to 
it  an  apprenticeship  of  seven  years  at  least;  and 
what  before  had  been  the  by-law  of  many  cor- 
porations became  in  England  the  general  and 
public  law  of  all  trades  in  market  towns."  (p. 
108.) 

Smith  says  that  seven  years  seems  to  have 
been  all  over  Europe  the  usual  term  of  appren- 
ticeship in  the  greater  part  of  incorporated 
trades;  and  he  severely  condemns  such  long 
apprenticeships,  as  both  unnecessary  for  acquir- 
ing a  reasonable  knowledge  of  any  trade,  and  as 
injurious  to  the  character  and  habits  of  the 
apprentice,  since  he  generally  served  without  any 


AND  UNSKILLED  LABOR.  105 

Other  pay  than  merely  his  keep  in  board,  lodg- 
ing and  clothes ;  and  thus  he  had  no  incentive  to 
spur  him  on  in  his  work,  but  on  the  contrary  fell 
into  a  spirit  of  sullen  resentment  toward  the 
master,  and  gave  him  in  return  the  smallest  ser- 
vice he  could  get  by  with.  Smith  contends  that 
the  whole  purpose,  and  the  actual  result  of  these 
regulations,  was  to  restrict  competition  between 
the  followers  of  each  craft,  and  thus  artificially 
cause  a  scarcity  value  of  their  products,  and 
enable  them  to  exact  prices  for  their  goods  far 
above  what  free  competition  would  have  allowed. 
The  burden  of  these  excess  prices  fell  upon  the 
people  of  the  country-side,  the  occupiers  and 
tillers  of  the  land,  who  had  no  opportunity  for 
off-setting  these  maneuvers  by  united  action  and 
corporations  of  their  own.  And  thus  were  estab- 
lished customary  rates  of  pay  for  labor  on  land, 
of  half,  or  less  than  half,  the  rate  of  pay  for 
mechanics  and  artisans  of  the  towns. 

"The  government  of  towns  was  altogether  in 
the  hands  of  traders  and  artificers,  and  it  was 
the  manifest  interest  of  every  particular  class  of 
them  to  prevent  the  market  from  being  over- 
stocked with  their  own  particular  goods.  Each 
class  was  eager  to  establish  regulations  for  this 
purpose,  and  if  it  was  allowed  to  do  so,  was  will- 
ing that  other  classes  should  do  the  same.  In 
consequence  of  such  regulation  each  class  was 
obliged  to  buy  needed  goods  from  other  classes 
at  a  somewhat  higher  price  than  they  otherwise 
might  have  done,  but  was  enabled  to  sell  their 
own  products  at  a  similarly  enhanced  price;  so 
that  so  far  it  was  as  broad  as  it  was  long.     But 


io6  EQUAL  VALUE  OF  SKILLED 

in  their  dealings  with  the  country  people  they 
were  all  great  gainers;  and  in  these  latter  deal- 
ings consists  the  trade  which  supports  and  en- 
riches every  town."    (Book  I,  chapter  10,  p.  112.) 

''Every  town  draws  its  whole  subsistence  and 
all  the  materials  of  its  industry  from  the  coun- 
try. It  pays  for  these  chiefly  in  two  ways:  first 
by  sending  back  to  the  country  part  of  those 
materials  wrought  up  and  manufactured;  sec- 
ondly by  sending  to  it  both  crude  and  manufac- 
tured produce  from  other  countries,  or  from 
distant  parts  of  the  same  country.  The  wages 
of  the  workmen,  and  the  profits  of  their  dififer- 
ent  employers,  make  up  the  whole  of  what  is 
gained  upon  both.  Whatever  regulations  there- 
fore tend  to  increase  those  wages  and  profits 
beyond  what  otherwise  they  would  be,  enables 
the  town  to  purchase  with  a  smaller  quantity  of 
its  labor,  the  produce  of  a  greater  quantity  of 
country  labor.  They  give  the  traders  and  arti- 
ficers in  the  town  an  advantage  over  the  land- 
lords, farmers,  and  laborers  in  the  country;  and 
break  down  that  natural  equality  which  would 
otherwise  obtain  in  the  commerce  between  them. 
The  whole  annual  produce  of  the  labor  of  so- 
ciety is  annually  divided  between  these  two  sets 
of  people  [city  and  country].  By  means  of  those 
regulations,  above  described,  a  greater  share  is 
given  to  the  inhabitants  of  the  towns  than  would 
otherwise  fall  to  them,  and  a  lesser  to  those  of 
the  country,     (p.  113.) 

"The  industry  of  the  town,  by  these  means, 
becomes  more  advantageous,  and  that  of  the 
country  less  so.     That  the  industry  in  towns  is 


AND  UNSKILLED  LABOR.  107 

everywhere  in  Europe  more  advantageous  than 
that  which  is  carried  on  in  the  country  we  may 
satisfy  ourselves  by  one  very  simple  and  obvious 
observation.  In  every  country  of  Europe  we  find 
at  least  a  hundred  people  who  have  acquired 
great  fortunes  from  small  beginnings  by  trade 
or  manufacture,  for  one  who  has  done  so  by 
activity  that  properly  belongs  to  the  country,  by 
the  cultivation  of  land.  The  inhabitants  of  a 
town,  being  collected  in  one  place  can  easily  com- 
bine together.  The  most  insignificant  trades 
carried  on  in  towns  have  been  incorporated.  The 
inhabitants  of  the  country  live  dispersed  and 
cannot  easily  combine.  They  have  never  been 
incorporated,  and  the  incorporation  spirit  has 
never  prevailed  among  them.  No  apprentice- 
ship has  ever  been  thought  necessary  to  qualify 
for  husbandry,  the  great  trade  of  the  country." 
(p.  114.)  Smith  contends  that  it  requires  more 
sense  and  sound  judgment  to  be  a  successful 
husbandman,  than  is  required  in  most  trades. 

"The  common  ploughman,  though  generally 
regarded  as  a  pattern  of  stupidity  and  ignorance, 
is  seldom  defective  in  his  judgment  and  discre- 
tion. In  China  and  Indostan  both  the  rank  and 
the  wages  of  the  country  laborers  are  said  to  be 
superior  to  those  of  the  greater  part  of  artificers 
and  manufacturers.  They  would  probably  be  so 
everywhere,  if  corporation  laws  and  corporation 
spirit  did  not  prevent."     (p.  115.) 

"Townspeople  of  the  same  trade  seldom  meet 
together  for  merriment  or  diversion  but  the  con- 
versation ends  in  a  conspiracy  against  the  public 


io8  EQUAL  VALUE  OF  SKILLED 

or  in  some  contrivance  to  raise  prices."  (p.  117.)* 
This  is  Adam  Smith's  explanation  of  how  arose 
the  custom  of  paying  country  labor,  from  which 
so  largely  the  unskilled  labor  of  the  cities  is  re- 
cruited, a  much  smaller  wage  than  is  paid  me- 
chanics, artificers,  and  traders.  Smith  says  in 
effect  that  country  labor  was  the  last  to  emerge 
from  actual  bondage;  that  the  wages  of  me- 
chanics and  craftsmen  were  artificially  raised  as 
the  result  of  rules  and  regulations  instituted  by 
incorporated  guilds,  which  raised  the  price  of 
their  products  above  the  level  that  free  compe- 
tition would  have  established,  and  which  enabled 
the  masters  to  pay  their  journeymen  help  much 
higher  wages  than  labor  on  the  farm  was  able  to 
command.  In  other  words,  it  was  effected 
through  such  "trusts"  and  combinations  in  re- 
straint of  trade,  as  in  modern  times  have  been 
condemned  and  outlawed,  and  by  methods  which 
we  of  today  characterize  as  criminal,  as  fraud 
and  imposition;  methods  which  in  the  exchange 
of  products  circumvent  and  defeat  that  exchange 
of  labor  for  equal  labor  which  is  the  economic 
ideal  of  fairness  and  justice,  and  which  prac- 
tically all  economists  proclaim  as  such. 

Now  while  Adam  Smith's  explanation  may 
not  cover  the  entire  case,  and  while  he  may  have 
overlooked  some  things  and  over-estimated 
others,  yet  he  was  beyond  doubt  the  most  clear- 


*  My  copy  of  Adam  Smith  is  a  1914  Everyman's  Library 
edition,  and  the  page  numbers  given  may  not  correspond 
with  those  of  other  editions  of  the  Wealth  of  Nations:  but 
it  should  not  be  difficult  to  locate  the  cited  passages  by  book 
and  chapter  stated.  The  passages  given  are  not  full  quota- 
tions but  are  much  abbreviated. 


AND  UNSKILLED  LABOR.  109 

sighted  of  all  economists,  and  the  most  eminent. 
He  was  a  man  of  rare  learning  and  insight,  a 
traveler  and  a  student,  and  of  unassailable  char- 
acter. He  spent  ten  years  writing  his  great  book 
"An  Inquiry  into  the  Wealth  of  Nations,"  and 
in  doing  $0  delved  deep  into  historical  records, 
examining  many  original  documents,  and  was 
thus  able  to  embody  much  valuable  information 
in  his  book.  This  man's  words  are  entitled  to 
a  most  respectful  hearing,  and  his  opinion  should 
carry  great  weight  generally,  as  also  on  the  points 
discussed  above,  explaining  the  causes  which  es- 
tablished the  discriminating  low  rate  of  pay  for 
country  labor,  and  hence  for  the  unskilled  labor 
of  cities,  largely  recruited  from  the  country. 

But,  as  remarked  above,  Adam  Smith's  ex- 
planation may  not  cover  the  whole  case;  there 
may  be  additional  causes  which  contribute  to  the 
same  efifect,  some  of  which  may  have  come  into 
play  since  Smith  wrote.  Let  us  see  what  fur- 
ther can  be  brought  forward  as  accounting  for 
the  low  estimate  put  upon  unskilled  labor  and 
its  principal  recruiting  source,  farm  labor.  That 
the  peasant  labor  of  Europe  emerged  from  bond- 
a,s:e  and  serfdom  long  after  the  mechanics  and 
artificers  of  the  cities  were  free,  is  a  well  known 
historical  fact.  The  catching  of  and  trading  in 
negro  slaves  began,  as  far  as  modern  Europe  is 
concerned,  in  1442,  and  was  not  outlawed  till 
about  the  close  of  the  18th  century.  The  serf- 
dom of  peasants  was  not  abolished  in  Prussia 
till  1810  and  in  Russia  in  1861.  Peonage  ceased 
in  Brazil  in  1885;  and  actual  negro  slavery  con- 
tinued in  English  colonies  until  1833  and  in  the 


no  EQUAL  VALUE  OF  SKILLED 

United  States  till  terminated  by  the  civil  war, 
1863.  All  this  time  the  mechanics  of  the  cities 
had  been  free  of  bondage  for  hundreds  of  years ; 
and  note  that  in  all  the  above  cases  it  was  the 
peasant,  country  labor,  that  had  been  freed  at 
such  a  late  day,  and  that  the  black  slaves  of 
English  colonies,  and  in  the  United  States,  were 
practically  all  either  domestic  servants  or  plan- 
tation laborers,  agricultural  labor.  The  slaves 
of  our  Southern  States  worked  in  the  corn  and 
cotton  fields,  on  sugar  and  tobacco  plantations. 
When  this  labor  was  changed  from  slave  to 
wages  labor,  it  naturally  followed  that  it  was 
paid  a  mere  subsistence  wage,  a  wage  commen- 
surate for  a  serf;  and  these  people,  rejoicing  in 
their  new-found  freedom,  were  content  with  this 
wage,  and  thus  it  must  have  had  a  very  depress- 
ing efifect  on  the  compensation  of  all  country 
labor,  and  on  the  prices  commanded  by  the  prod- 
ucts thereof.  This  accords  with,  and  reenforces 
the  reasoning  of  Adam  Smith,  and  shows  that 
the  low  valuation  of  farm  labor  is  largely  an 
after-efifect  of  ancient  and  medieval  slavery. 

But  there  are  still  other  causes  which  con- 
tribute to  the  same  effect.  One  of  these  causes, 
it  seems  to  me,  has  been  overlooked  by  all  writers 
on  economics  that  have  come  to  my  notice.  That 
cause  lies  in  the  fact  that  in  the  very  nature  of 
things  there  must  be  a  continual  decrease  in  the 
required  amount  of  farm  labor  as  compared  with 
industrial  and  commercial  labor,  in  every  country 
of  advancing  civilization.  The  farmer  produces 
principally  the  necessaries  of  food.  This  is  a 
quantity,  the  demand  for  which  is  limited  by  the 


AND  UNSKILLED  LABOR.  in 

number  of  mouths  to  be  fed;  even  a  millionaire 
can  eat  only  a  certain  amount  of  bread,  meat, 
and  potatoes.  The  demand  for  food  is  distinctly 
limited ;  but  not  so  the  demand  for  improved  wear 
and  housing,  for  increased  conveniences  and 
comforts,  which  are  the  products  of  industrial 
labor.  For  these  products  there  is  no  definite 
limit,  the  only  limit  being  the  purchasing  ability 
of  the  people  and  their  desire,  and  this  increases 
with  every  advance  in  civilization.  And  even 
the  amount  of  farm  labor,  required  for  a  given 
amount  of  farm  produce,  is  constantly  declining, 
owing  to  the  increased  use  of  farm  machinery, 
and  the  substitution  of  steam,  electricity,  and 
gasoline  for  horse  and  man  power,  not  only  for 
transportation  and  haulage,  but  also  on  field 
and  farm  itself.  While  this  machinery  displaces 
farm  labor,  the  making  of  same  requires  addi- 
tional industrial  labor.  In  consequence  of  this 
inevitable  accompaniment  of  an  advancing  civil- 
ization, farm  labor  is  continually  in  excess  of  the 
demand,  and  its  market  price  is  correspondingly 
depressed;  and,  drifting  into  the  cities  as  un- 
skilled labor,  it  depresses  the  wage  rate  there  for 
that  class  of  labor.  In  other  words,  unskilled 
laborers  are  the  victims  of  the  irrational  condi- 
tions resulting  from  permitting  unregulated 
supply  and  demand  to  rule  in  these  matters. 

Adam  Smith  'contends  that  the  agricultural 
laborer,  the  common  ploughman  he  says,  has 
more  sense  and  discretion  than  the  town  me- 
chanic, and  possesses  superior  intelligence;  and 
that  the  husbandman  requires  in  his  work  more 
knowledge  and  experience  than   is  required  in 


112  EQUAL  VALUE  OF  SKILLED 

the  greater  part  of  mechanic  trades.  I  do  not  sub- 
scribe to  this  opinion,  at  least  not  for  our  time 
and  especially  for  European  countries;  and  I 
prefer  to  argue  the  case  for  unskilled,  and  for 
farm  labor,  rather  on  the  opposite  presumption, 
that  the  farm  laborer,  and  the  unskilled  laborer, 
on  the  average,  is  less  intelligent  and  less  alert 
than  the  city  bred  mechanic  and  artisan;  and 
that  less  skill  and  intelligence  is  required  in  his 
work.  I  have  on  a  previous  page  admitted  this 
in  regard  to  valuation,  and  I  have  ofifset  that  les- 
ser skill  with  the  greater  irksomeness  and  labor 
pain  generally  endured  by  the  unskilled  laborer. 
Let  us  admit,  for  the  sake  of  argument,  that  this 
unskilled  laborer,  whether  city  bred  or  from  the 
country,  is  dull  and  stupid  and  ignorant.  Would 
you  punish  him  for  that?  Is  it  really  his  fault 
in  the  sense  of  his  being  blamable  for  it?  It 
would  be  as  reasonable  to  blame  the  blind  or  the 
deaf  for  being  so  born,  and  to  punish  them  for 
their  misfortune.  The  man  who  is  dull  and 
stupid  is  not  so  because  it  is  his  deliberate  choice 
to  be  so ;  not  at  all.  It  is  the  unpropitious  accident 
of  birth ;  he  is  the  victim  of  a  low  grade  heredity. 
This  is  his  misfortune,  not  his  choice.  If  he  is 
ignorant,  that  also  is  his  misfortune.  Either  he 
had  no  chance  for  schooling,  for  acquiring  edu- 
cation, or  learning  a  trade  and  becoming  a  skilled 
worker,  or  else  he  was  born  without  capacity  and 
disposition  for  such  things;  and  this  again  is  a 
matter  of  heredity  and  accident  of  birth.  To  be 
born  in  a  country  or  in  a  district  that  makes  no 
provision  for  schools,  and  does  not  impose 
schooling  upon  the  children,  but  lets  them  grow 


AND  UNSKILLED  LABOR.  113 

up  illiterates,  is  not  the  victim's  choice,  but  his 
misfortune;  a  misfortune  which  befalls  H5  per 
cent  of  the  Russian  peasants,  as  well  as  a  large 
per  cent,  of  people  in  southern  Europe,  and  quite 
a  number  of  the  colored  population  of  our  own 
Southern  States  as  well  as  many  poor  whites  in 
the  hill  districts.  Add  to  this  the  evil  of  child 
labor,  which  is  rampant  in  this  country  as  well 
as  abroad,  and  which  foredooms  many  children 
to  comparative  ignorance  of  letters,  as  well  as 
to  work  in  so-called  unskilled  pursuits.  Thus  it 
is  that  by  misfortune  of  ill  birth,  or  by  the  mis- 
fortune of  ill  circumstance  of  environment  and 
condition  during  childhood,  these  unskilled 
workers  have  become  for  you  hewers  of  wood 
and  drawers  of  water;  and  would  you  now  add 
injury  to  their  misfortune  by  putting  upon  their 
labor  pain  a  value  estimate  of  one-half  or  one- 
fourth  the  value  you  put  upon  your  own  labor 
pain?  For  shame  man,  you  who  thinkest  so,  go 
and  hide  yourself,  and  talk  you  not  of  social  jus- 
tice or  of  human  brotherhood. 

Know  you  not  that  the  real  and  final  value 
determinant  of  anything  is  the  amount  of  labor 
burden,  labor  pain,  endured  in  producing  such 
thing;  and  that  when  you  acquire  any  such 
thing  by  exchange  or  by  purchase,  which  is  but 
another  name  for  exchange,  then  you  are  saved 
the  labor  pain  necessary  for  producing  this  thing, 
since  the  producer  thereof  has  endured  that  labor 
pain  for  you;  and  there  is  not,  and  cannot  be, 
any  fair  and  just  price  in  exchange,  other  than 
an  equal  amount  of  labor  pain,  embodied  in  some 
Other  article,  or  endured  in  rendering  some  ser- 


114  EQUAL  VALUE  OF  LABOR. 

vice  in  exchange,  as  the  ultimate  purchase  price 
for  such  thing?  This  has  already  been  stated 
several  times,  but  it  cannot  be  repeated  too  often, 
because  this  is  the  basis  of  the  entire  economic 
philosophy  and  the  value  theory  presented  in  this 
book.  I  see  and  I  know  many  men,  utterly 
stupid  and  ignorant,  and,  what  is  worse,  vile  in 
character,  debased,  vicious,  repulsive ;  with  whom 
I  would  not  associate  nor  have  any  companion- 
ship, who  could  under  no  circumstances  be  my 
friends  nor  I  theirs ;  yet  when  such  a  one  performs 
a  day's  labor  of  standard  efficiency,  then,  I  say, 
he  is  entitled  to  the  same  reward,  and  his  labor 
pain  to  the  same  consideration,  as  my  day  of 
labor  pain  and  labor  of  standard  efficiency,  re- 
gardless of  his  looks,  his  name,  or  his  moral  char- 
acter. In  the  value  estimate  of  labor  pain  all 
should  stand  upon  a  level  of  perfect  equality. 


Chapter  VII. 

No  Labor  Without  Some  Skill.     Present 
Tendency  Toward  Equal  Compensation. 

But  many  people  will  still  be  unable  to  accept 
as  sound  and  logical  this  reasoning  which  em- 
phasizes labor  pain  as  the  real  value  determinant ; 
They  will  not  be  able  to  discard  the  notion  that 
skill  and  training  of  the  laborer  imparts  a  supe- 
rior value  to  his  product,  and  that  this  in  turn 
reflects  a  corresponding  value  on  the  labor  or 
service  involved;  and  that  therefore  this  skill  and 
capacity  is  the  deciding  factor  in  value  determi- 
nations. Do  not  overlook  the  fact  that  I  have 
assumed  utility  as  an  essential  element  of  value, 
and  that  I  also  have  insisted  on  capacity  and 
efficiency  when  I  specified  "useful  labor  of 
standard  efficiency."  Now  ^standard  efficiency 
does  not  necessarily  and  exclusively  mean  deft- 
ness of  hand  and  a  trained  eye ;  it  may  also  mean 
trained  strength  and  endurance.  In  this  sense 
there  is  really  no  unskilled  labor;  for  even  the 
roughest  and  least  dextrous  requires  some  de- 
gree of  practice  and  training  to  acquire  pro- 
ficiency and  endurance.  There  is  a  certain  kind 
of  skill  required  in  wielding  a  pick  or  shovel 
effectively,  and  considerable  in  wielding  a  sledge 
hammer  or  an  axe  or  a  woodsaw.  So  there  is  in 
shoving  lumber  or  handling  brick  or  freight  and 
live  stock;  as  certainly  it  requires  skill  to  drive 
teams,  especially  on  the  crowded  streets  of  large 
cities.    In  all  similar  work  a  certain  measure  of 

"5 


ii6  TENDENCY  TOWARD  EQUAUTY. 

skill  and  experience  is  acquired  by  the  doing 
thereof,  so  much  so  that  here  a  period  of  appren- 
ticeship may  be  in  order  just  as  well  as  in  the 
trades;  and  certainly  it  requires  an  apprentice- 
ship to  become  proficient  at  farm  labor,  plowing, 
seeding,  harvesting,  milking,  tending  stock,  and 
various  other  jobs,  many  of  which  in  these  latter 
days  involve  the  use  of  machinery. 

Let  us  next  assume,  for  the  sake  of  argument, 
that  this  unskilled  labor  is  poorly  paid  because 
the  supply  thereof  exceeds  the  demand,  and 
therefore  commands  a  low  price  or  rate  of  wages ; 
and  that  therefore,  according  to  accepted 
political  economy,  a  reduction  of  this  supply 
of  unskilled  labor  below  the  demand  for 
same,  might  raise  the  price  or  wages  thereof, 
even  above  the  rate  paid  for  skilled  labor.  Now 
all  general  educational  institutions  of  these  latter 
days,  beginning  with  the  public  schools  and  on 
through  the  whole  list  of  auxiliary  schools,  voca- 
tional, night  schools,  business  colleges,  and  cor- 
respondence schools,  not  only  raise  the  general 
level  of  intelligence,  but  continually  push  boys 
and  young  men  into  the  so-called  skilled  pur- 
suits, and  tend  to  deplete  the  supply  of  unskilled 
labor.  Generally  speaking,  common  laborers, 
insofar  as  they  are  sensible  and  given  to  sobriety, 
will  strive  to  give  their  children  a  better  start  in 
life  than  fell  to  their  own  lot;  give  them  as  much 
education  as  they  can  aflford,  and  at  least  cause 
them  to  learn  a  trade.  Even  widows  will  skimp 
and  deny  themselves,  to  enable  their  children  to 
attain  a  station  in  life,  which,  conforming  to 
ruling  notions,  is  better  than  that  of  a  mere  un- 


NO  LABOR  WITHOUT  SKILL.  117 

skilled  laborer.  The  increasing  general  intelli- 
gence also  improves  the  heredity  and  early  en- 
vironment of  the  coming  generations,  so  that, 
aside  from  actual  defectives,  practically  all  pos- 
sess capacity  for  some  form  of  skilled  labor. 
These  influences,  gathering  cumulative  strength, 
will  in  a  few  generations  reduce  the  supply  of 
unskilled  labor  to  a  great  scarcity,  and  by  virtue 
of  competitive  effect  bring  about  that  equality  of 
pay  for  skilled  and  unskilled  labor,  at  which  the 
skilled  mechanic  now  is  inclined  to  rage  like  a 
mad  bull  at  a  red  rag.  Why  not  instead  of 
opposing  the  inevitable,  accept  it  gracefully,  and 
meet  it  in  a  sane  and  brotherly  spirit?  Why 
not  accept  this  equality  of  compensation  as  emi- 
nently just  and  proper,  and  as  the  only  thing 
that  can  establish  peace  on  earth  and  good  will 
among  men  ? 

It  is  true,  the  foremost  nations,  while  they 
found  schools,  spread  education,  and  establish 
some  measure  of  democracy,  which  inevitably 
must  lead  to  a  scarcity  -of  unskilled  labor  as 
shown  above,  have  at  the  same  time  pursued  a 
policy  of  increasing  that  supply  by  opening  their 
gates  for  the  influx  of  cheap  labor,  even  to  the 
extent  of  importing  captive  negroes  and  main- 
taining chattel  slavery.  In  this  wise  the  fathers 
have  left  behind  them  in  this  country  the  ominous 
curse  of  a  race  question.  And  there  are  men  in 
this  country  today,  so  fatuous  as  to  advocate  the 
mass-importation  of  Chinese  coolies  and  other 
alien  and  unassimilable  races  in  order  to  provide 
a  supply  of  cheap  common  labor ;  thus  proposing 
to  add  another  race  question  to  the  one  that  now 


ii8  TENDENCY  TOWARD  EQUALITY. 

baffles  our  wisest  minds.  Such  proposals  are 
unblushingly  made,  by  men  belonging  to  the 
dominant  class,  the  so-called  employing  class,  in 
order  to  secure  an  abundant  supply  of  cheap 
labor,  and  thus  prevent  the  rate  of  wages  for 
common  labor  from  rising  to  a  higher  level  of 
compensation,  such  as  it,  and  agricultural  labor, 
might  attain  if  not  thus  arbitrarily  checkmated. 
It  is  this  "we,"  this  dominant  and  ruling  faction 
in  every  country,  that  thinks  "it"  is  the  nation; 
that  speaks  of  "our"  country,  "our"  resources, 
"our"  soldiers;  and  who  seem  to  think  that  for 
their  class  all  things  exist,  and  in  their  interest 
all  things  are  to  be  managed;  foreign  markets 
captured,  and  colonies  acquired,  that  "we"  may 
trade  there  and  get  rich;  cheap  labor  secured 
that  "we"  may  compete  in  the  markets  of  the 
world,  and  everything  done,  that  "we"  may  rise 
to  dizzy  heights  of  opulence,  regardless  of  what 
happens  to  those  whom  they  think  of  as  the 
common  herd.  That  also  seems  to  be  the  chief 
desideratum  of  the  political  and  economic  policies 
of  present  day  statesmanship,  and  the  highest 
wisdom  of  present  day  scholars. 

But  it  is  high  time  to  reverse  such  a  policy; 
to  cease  worshipping  these  false  ideas,  and  to 
substitute  for  them  ideals  of  social  justice,  of 
fair  dealing,  of  making  men  in  fact  co-heirs  of 
this  world  and  its  opportunities  for  the  life 
abundant,  by  putting  an  equal  value  estimate  upon 
all  men's  labor  burden,  hour  for  hour,  whenever 
the  same  is  useful  and  of  standard  efficiency. 
Until  this  is  done  mankind  will  be  scourged  by 


NO  LABOR  WITHOUT  SKILL.  HQ 

war,  by  poverty,  by  crime,  and  by  the  blind  grop- 
ings  for  redress  of  infuriated  masses  of  men. 

I  said  that  even  today  a  distinct  tendency  to- 
ward equaHty  of  compensation  is  discernible,  at 
least  in  this  country,  and  probably  likewise  in 
other  leading  countries,  as  this  accords  with  the 
tendency  of  the  times  and  the  rising  tide  of 
democracy.  When  the  United  States  mobilized 
its  army  for  participation  in  the  European  war, 
the  pay  of  the  common  soldier  was  nearly  dou- 
bled, while  that  of  the  officers  was  raised  but 
slightly  over  what  it  was  at  the  time  of  the 
Spanish  American  war.  The  daily  papers  of 
May  18th,  1917,  had  this  item  among  others  re- 
lating to  the  new  army  bill  as  finally  passed: 
''Increasing  the  pay  of  all  enlisted  men  as  fol- 
lows: Fifteen  dollars  additional  monthly  for 
those  now  receiving  less  than  twenty-one,  com- 
prising the  bulk  of  the  army;  and  six  dollars 
additional  monthly  for  those  receiving  forty-five 
or  more.  This  is  an  increase  of  71  per  cent  on 
the  lowest  pay  and  only  13  per  cent  on  the  higher 
pay. 

"The  directors  of  the  Western  Union  Tele- 
graph Company  at  a  recent  meeting  voted  to 
give  their  employes  two  special  payments  during 
the  year  1917  to  meet  the  high  cost  of  living. 
Employes  receiving  less  than  $1200  a  year  will 
receive  an  additional  8  per  cent  of  their  annual 
wages;  those  receiving  from  $1200  to  $2000  will 
get  a  6  per  cent  addition,  and  those  receiving 
over  $20(30  will  get  5  per  cent."  Newspaper 
item,  July  6,  1917. 

"The  teachers  in  the  grades  of  Milwaukee 


120  TENDENCY  TOWARD  EQUALITY. 

public  schools  went  on  record  in  favor  of  a  liv- 
ing wage  at  a  regular  meeting  Wednesday  of 
the  Teachers'  Association,  recommending  a 
bonus  of  $120  a  year  for  those  receiving  $50  per 
month;  $60  for  those  receiving  $55  per  month; 
and  $45  for  those  receiving  from  $60  to  $90  per 
month."    Milwaukee  paper,  October  11,  1917. 

"The  Trustees  of  Purdue  University  (Lafay- 
ette, Indiana)  have  announced  that  the  pro- 
fessors and  instructors  are  to  receive  an  increase 
of  salary  averaging  10  per  cent  on  a  sliding 
scale,  the  ones  drawing  the  lower  salaries  getting 
the  larger  increase."  Newspaper  item,  Septem- 
ber 24,  1917. 

"Representative  Keating  asks  Congress  to  in- 
crease the  wages  of  all  federal  employes;  the 
increase  to  range  from  $300  for  those  receiving 
less  than  $1200,  to  $60  for  those  receiving  be- 
tween $1800  and  $2000  a  year.  For  $2  a  day 
workers  an  increase  of  $1  per  day  is  asked;  for 
those  receiving  $2.50  an  increase  of  80  cents  is 
asked,  for  $3  men  60  cents,  and  for  $4  men  an 
increase  of  20  cents  per  day."  News  item,  De- 
cember 28,  1917.  This  I  understand  is  a  propo- 
sition emanating  from  Samuel  Gompers  of  the 
American  Federation  of  Labor. 

The  daily  papers  of  January  1,  1918,  reported 
Governor  Whitman  of  New  York  as  having 
made  the  following  statement:  "I  have  allowed 
increases  for  practically  all  those  in  labor,  me- 
chanical and  low  paid  clerical  and  technical  ser- 
vice, where  requested  by  department  heads;  but 
I  have  disallowed  all  requested  increases  for  em- 
ployees now  receiving  $3000  a  year  or  more." 


NO  LABOR  WITHOUT  SKILL.  121 

The  above  six  items  are  indications  showing 
that  the  world  is  groping  its  way  toward  equal 
compensation  for  all  useful  labor  of  standard 
efficiency. 

Uplifters  have  for  a  number  of  years  been  ad- 
vocating a  minimum  wage,  especially  so  for 
women.  I  have  before  me  a  newspaper  clipping 
dated  August  17,  1917,  and  credited  to  the  New 
York  Survey.  It  says,  "The  Supreme  Court 
gave  a  decision  on  April  9th,  upholding  as  con- 
stitutional the  Ore!2:"on  minimum  wage  law.  This 
has  given  impetus  to  the  enforcement  of  State 
minimum  wage  legislation  that  has  been  await- 
ing federal  judgment.  The  Arkansas  Supreme 
Court  has  upheld  the  Arkansas  minimum  wage 
law  providing  a  flat  rate  of  recompense  for  in- 
experienced women  of  not  less  than  one  dollar  a 
day  of  nine  hours.  More  recently  the  State  In- 
dustrial Welfare  Commission  of  California  has 
announced  a  revised  wages  schedule  for  women 
employed  in  mercantile  establishments.  It  pro- 
vides a  rate  of  not  less  than  $10  per  week  or 
$43.33  a  month  for  experienced  women;  and  $6 
per  week  for  girl  learners  under  18  years,  and 
$8  per  week  for  those  between  18  and  20  years, 
and  for  both  an  increase  of  50  cents  per  week 
every  six  months  until  the  standard  rate  of  $10 
per  week  has  been  reached.  The  hours  are  lim- 
ited to  eight  per  day  and  not  to  exceed  forty- 
-cieht  a  week." 

Men  are  discussing  a  minimum  wage  now;  I 
venture  to  say  that  soon  they  will  discuss  a 
maximum  wage.  And  why  not  a  maximum 
wage?    That  is  what  the  discussion  of  a  minimum 


122  TENDENCY  TOWARD  EQUALITY. 

wage  naturally  will  suggest.  And  what  can  that 
maximum  be?  Only  one  kind  of  natural  maxi- 
mum wage  is  possible  or  thinkable,  and  that  is 
a  wage  which  is  equal  for  all  whose  work  is  of 
standard  efficiency.  From  this  conclusion  there 
is  no  escape,  it  is  certain  fate,  manifest  destiny. 
Much  has  of  late  been  written  about  the  high 
cost  of  living,  and  most  of  it  has  been  silly  stufif, 
evidencing  the  dense  ignorance  of  the  writers. 
The  blame  for  this  high  cost  has  been  laid  on 
the  railroads,  on  poor  wagon  roads,  on  faulty 
marketing,  on  poor  farming  and  wastage  on  the 
farm,  on  the  middlemen,  commission  men  and 
retailers,  on  speculators,  on  bankers,  on  Wall 
Street,  and  on  the  produce  exchange,  on  the 
money  system  and  even  on  an  excessive  gold 
supply.  This  is  all  phantom  chasing.  The  plain 
and  simple  truth  is  that  the  farmer  is  beginning 
to  come  into  his  own,  is  beginning  to  demand  a 
fair  compensation  for  his  work,  and  his  help  is 
demanding  a  fair  wage;  encouraged  to  do  so  by 
the  comparative  scarcity  of  farm  labor,  which  is 
beginning  to  make  itself  felt,  and  which  is  caused 
bv  the  drift  of  farm  laborers  to  the  better  paid 
employments  in  the  cities.  Farmers  are  begin- 
ning to  look  upon  themselves  as  being  just  as 
good  as  other  men,  and  entitled,  equally  with 
other  people,  to  the  comforts  and  decencies  of 
civilized  life,  and  thev  are  demanding  and  getting 
better  prices  for  their  products  than  ever  before 
was  the  case;  hence  cost  of  living  has  gone  up 
for  city  people,  and  we  may  rest  assured  it  will 
never  come  down  to  what  formerly  it  was.  The 
work  of  the  farmer  and  his  help  will  have  to  be 


NO  LABOR  WITHOUT  SKILL.  123 

paid  at  approximately  the  same  rate  as  the  work 
of  mechanics  in  the  cities,  or  the  farmers'  sons 
and  daughters  and  hired  men  will  continue  to 
drift  to  the  cities  as  they  have  been  doing,  until 
an  equilibrium  is  established  and  until  farm 
laborers,  because  of  increasing  scarcity,  rank  as 
high  in  pay  as  city  mechanics.  This  is  the  ten- 
dency toward  equal  compensation;  and  as  this 
influence  raises  the  pay  and  the  value  estimate 
put  upon  farm  labor,  so  will  the  latter,  because 
of  its  correlation,  help  to  raise  the  pay  and  the 
value  estimate  put  upon  unskilled  labor  in  the 
cities  toward  that  common  level  of  equality  for 
all  useful  work  of  standard  efficiency  which  is 
the  gospel  and  the  prediction  of  this  my  book. 

I  fear  that  this  long  argument  has  wearied 
some  readers.  But  it  has  been  necessary  in  order 
to  convince  men  of  the  reasonableness  and  the 
justice  of  estimating  all  labor  pain  alike,  in  who- 
soever's  back  and  muscles  it  is  felt ;  and  of  putting 
the  same  value  estimate  on  all  kinds  of  useful 
labor  of  standard  efficiency,  hour  for  hour.  For 
upon  this  my  entire  economic  philosophy  and  the 
validity  of  my  value  theory  depend.  Once  this 
principle  of  equal  value  and  equal  compensation 
for  every  standard  efficiency  labor  hour  is 
accepted,  then  the  theory  follows  as  a  matter  of 
self-evident  logic,  that  the  value  of  any  article 
of  exchange,  any  commodity,  depends  upon  how 
many  hours  of  standard  labor  is  embodied 
therein.  But  it  will  probably  be  necessary  to  re- 
peat these  arguments  over  and  over  again,  be- 
fore the  dormant  sensibilities  of  any  great  num- 
ber of  this  poor  humanity  is  awakened.    I  shall. 


124  TENDENCY  TOWARD  EQUALITY. 

however,   now  end   this  part  of  the  discussion 
with  a  few  brief  statements. 

Many  years  ago  I  heard  a  speaker  recite  these 
Hnes,  which  at  the  time  were  new  to  me: 
"Till  the  war  drums  throbb'd  no  longer  and  the 
battle  flags  were  furl'd 
In  the  Parliament  of  man,  the  Federation  of  the 
world." 

These  lines  have  been  ringing  in  my  ears  ever 
since  with  a  strange  significance.  While  Tenny- 
son had  in  mind  a  parliament  of  nations,  to  settle 
political  and  internatonal  disputes,  I  at  once 
applied  these  lines  to  the  industrial  warfare  and 
disputes  within  nations.  What  do  you  suppose, 
dear  reader,  such  a  parliament  of  man  within  a 
nation,  representative  of  all  the  various  workers 
in  that  nation,  would  decree,  in  order  to  establish 
general  industrial  justice  and  fair  dealing  for  all, 
especially  in  regard  to  the  distribution  of  the  na- 
tion's annual  wealth  production;  which  is  but 
another  name  for  fixing  the  compensation  for 
all  kinds  of  labor,  and  putting  an  estimate  on 
every  man's  labor  pain?  What  would  they  de- 
cide? What  else  could  such  a  parliament  of  man 
decree  in  this  matter,  than  equal  compensation 
for  all  kinds  of  useful  work  of  standard  efficiency? 
No  other  decision  is  thinkable. 

I  am  addressing  my  plea  to  all  men  possessing 
mind  and  heart;  to  scholars,  thinkers,  and  espe- 
cially to  economists.  I  am  also  addressing  my 
words  to  the  social  bottom  strata,  the  so-called 
unskilled  laborers,  the  victims  of  the  world's  un- 
just value  estimates;  that  these  men  may  be  en- 


NO  LABOR  WITHOUT  SKILL.  125 

couraged  to  demand  fair  play.  But  above  all  I 
address  my  words  to  skilled  labor,  particularly 
the  crafts  and  trades  organized  into  unions  and 
federations,  the  aristocracy  of  labor;  and  I  ask 
you,  union  men,  once  more :  do  you  want  to  con- 
tinue the  universal  feud,  the  endless  dispute  and 
contention  about  wages,  the  industrial  war,  the 
perpetual  antagonism  and  clash  of  interests? 
Shall  each  organized  craft  strive  against  all 
other  crafts  and  the  rest  of  the  nation  for  more 
pay,  for  advantage  at  the  expense  of  all  the  rest 
of  their  fellow-citizens  ?  Do  you  insist  upon  con- 
tinuing under  a  so-called  law  of  supply  and  de- 
mand, which  in  fact  is  but  a  disguised  law  of  the 
jungle,  a  law  of  tooth  and  claw,  a  law  of  over- 
reaching and  besting  your  weaker  or  unwary 
fellowman,  or  taking  advantage  of  his  weakness 
or  his  need  and  distress,  to  compel  him  to  give 
you  two,  three,  or  four  hours  of  his  work  for 
one  hour  of  yours?  Or  do  you  want  industrial 
peace;  do  you  want  to  settle  once  and  for  all, 
what  is  a  fair  and  just  wage  for  every  man  and 
woman,  by  accepting  this  principle,  that  every 
man's  labor  pain  is  entitled  to  the  same  consid- 
eration; that  all  useful  labor  of  standard  effi- 
ciency is  entitled  to  the  same  value  estimate,  and 
is  of  equal  value?  Are  you  ready  to  rise  to  that 
exalted  moral  attitude,  of  being  willing  to  pay 
with  an  hour's  service  of  yours  every  man  who 
renders  you  an  hour's  service?  Are  you  ready 
to  pav  with  an  hour  of  vour  labor  for  every  hour 
of  labor  embodied  in  the  article  you  purchase? 
Accepting  this  you  accept  that  righteousness  of 


126  TENDENCY  TOWARD  EQUALITY. 

heaven,  which  having  found,  all  things  else  have 
been  promised  unto  you.  O  that  my  book  may 
not  be  like  a  voice  whose  sound  is  lost  in  the 
wilderness  and  reaches  no  human  ear. 


Chapter  VIII. 

Ultimacy  in  Value  and  Summary  of  Value 

Theory. 

Assuming  that  the  reader  has  accepted  this 
fundamental  principle  of  equal  value,  hour  for 
hour,  for  all  kinds  of  useful  work  of  standard 
efficiency,  we  see  that  all  the  difficulty  of  de- 
termining values  has  vanished.  The  perplexing 
value  problem  is  solved;  and  it  becomes  a  mere 
question  of  arithmetic,  of  adding  up  the  sum  of 
hours  or  minutes  of  standard  labor  embodied  in 
any  article  of  material  wealth,  from  the  first  raw 
material,  through  all  the  various  processes  of 
manufacture,  including  transportation  and  hand- 
ling in  distribution,  until  it  reaches  the  ultimate 
consumer.  This  theoretically  solves  the  problem 
of  determining  the  value  of  any  article  of  eco- 
nomic exchange.  In  practice  it  may  be  expedient 
to  add  a  certain  per  cent  above  this  to  the  selling 
price,  to  take  the  place  of  various  forms  of  taxa- 
tion for  raising  the  funds  necessary  to  pay  the 
salaries  and  other  expenses  of  education,  ad- 
ministration, the  judiciary,  and  for  health,  police, 
and  fire  protection;  as  well  as  for  replacement 
and  addition  to  the  machinery  of  production  and 
transportation.  I  defer  consideration  of  this 
detail  to  be  taken  up  in  Part  III. 

I  shall  now  discuss  what  some  economists  have 
called  ultimacy  in  value;  and  perhaps  some 
readers  have  already  felt  this  to  be  missing  in 

my  discussion. 

127 


128  ULTIMACY  IN  VALUE. 

Granting  that  the  amount  of  standard  labor 
time  embodied  in  any  article  measures,  or  de- 
termines, the  value  of  that  article,  it  may  be 
asked,  zuliat  is  the  value  of  the  labor  hour;  how 
is  that  value  to  be  expressed  in  concrete  and 
definite  terms,  expressed  in  terms  of  the  money 
standard?  What,  in  such  terms,  is  the  value  of 
one  hour's  labor;  how  is  the  value  of  one  hour's 
standard  labor  to  be  measured  ?  Where  is  the 
ultimate  in  value  expression  to  be  found? 

This  I  have  not  yet  answered;  so  far  I  have 
dealt  only  in  comparisons,  compared  the  value 
of  one  hour's  labor  in  one  field  with  one  hour's 
labor  in  another  field  of  work,  and  I  have  con- 
tended for  equality  of  value  without  giving 
these  hours  of  labor  a  quantitative  expression, 
aside  from  their  time  value.  In  other  words, 
this  value  theory  has  not  yet  passed  beyond  the 
stage  of  being  a  mere  ratio  of  indefinite  quan- 
tities; ultimacy  is  still  wanting,  still  to  be  found. 
The  ultimate  of  value  expression,  the  value  of 
an  hour's  standard  labor  is  simply  to  he  arbi- 
trarily designated  by  proper  authority  and  given 
a  name,  either  as  an  hour  ticket  or  check,  or  as 
some  convenient  and  appropriate  sum  of  money, 
current  in  whatever  country  accepts  this  eco- 
nomic philosophy  and  value  theory. 

This  answer  will  probably  be  rejected  by 
many;  they  will  not  be  able  to  understand  it  be- 
cause of  its  very  simplicity;  it  will  baffle  them 
at  first  thought.  To  assist  the  reader  in  grasp- 
ing this  idea,  let  us  consider  the  somewhat  paral- 
lel case  of  establishing:  standard  measures  of 
length  by  arbitrary  decree.      Even  a  primitive 


SUMMARY  OF  VALUE  THEORY.  129 

civilization  needs  some  standard  of  weight  and 
measures.  It  is  interesting  and  instructive  to 
read  the  various  encyclopedia  articles  and  other 
discussions  on  this  subject,  which  show  that  pri- 
marily men  used  various  parts  of  the  human 
body  as  measures,  such  as  the  foot,  the  forearm 
(cubit),  the  palm  or  "hand,"  the  finger  or  digit; 
and  they  also  used  wheat  and  barley  grains,  both 
for  measures  and  weights;  the  names  of  some 
of  these  still  being  in  use.  These  measures  as 
also  their  originals,  the  human  foot  and  arm, 
were  of  course  very  indefinite  and  varying  in 
length,  and  in  course  of  time,  when  greater 
definiteness  was  required,  had  to  be  arbitrarily 
defined  by  legislative  authority,  in  order  to  bring 
about  some  degree  of  uniformity.  And  thus  at 
various  times  during  the  middle  ages  the  kings 
or  rulers  had  standards  prepared,  embodying 
length  and  weight;  bars  for  length  and  stones 
or  metal  pieces  for  weight ;  and  efforts  were  made 
to  enforce  conformity  thereto.  It  is  said  that  the 
length  of  Charlemagne's  foot  was  taken  as  the 
standard  length  of  a  foot,  and  was  acknowledged 
in  a  large  part  of  Europe  as  such  during  the 
Middle  Ages,  and  known  in  France  as  "the  royal 
foot,"  until  the  adoption  of  the  metre  unit  of 
measure.  Similarly  the  length  of  Henry  the 
First's  arm  was  accepted  as  the  length  of  a  yard 
in  England.  Besides  this,  an  old  English  statute 
declares  that  three  barleycorns,  good  and  dry, 
laid  end  to  end,  make  an  inch,  twelve  inches 
make  a  foot,  and  three  feet  make  a  yard. 

However,  authority  in  those  days  was  rather 
uncertain,  ever  in  dispute,  and  in  many  matters 


130  ULTIMACY  IN  VALUE. 

divided.  Consequently  there  was  no  uniformity 
in  these  measures  as  regards  various  parts  of  the 
same  country,  and  none  at  all  as  between  different 
countries;  and  indeed  there  is  not  today,  except 
a  partial  uniformity,  where  the  metrical  system 
has  been  legalized  and  more  or  less  completely 
adopted  in  actual  practice.  Provinces  and  towns 
formerly  exercised  in  such  matters  great  inde- 
pendence, with  the  result  of  causing  much  con- 
fusion and  variation  in  the  magnitude  of  like 
named  measuring  units.  "It  is  stated  in  a  Dic- 
tionary of  Weights  and  Measures  of  1850,  that 
there  were  at  that  time  known  and  recorded  5227 
varieties.  There  were  135  varieties  of  the  foot, 
60  of  the  inch,  29  of  the  pint,  53  of  the  mile,  and 
235  of  the  pound.  The  range  of  variation  of  the 
foot  has  been  from  8J  to  23]  inches  as  measured 
by  the  present  English  standard  inch."  (Profes- 
sor Le  Conte  Stevens  in  Popular  Science  Monthly 
for  March,  1904.) 

It  is  not  pertinent  here  to  pursue  this  interesting 
subject  further.  The  point  that  I  want  to  make 
is  this:  that  there  was  chaos  and  confusion  in 
length  measures  and  in  length  designations,  as 
there  was,  and  is  today,  confusion  and  chaos  in 
value  measures,  value  concepts,  and  value  esti- 
mates; that  length  and  weight  questions  were  at 
last  settled,  and  length  defined  by  arbitrarily  se- 
lected standards.  And  that  similarly  a  value  unit 
of  designation  may  be  arbitrarily  selected,  which 
once  chosen  and  legalized,  will  serve  all  men  alike, 
and  be  the  same  to  all  men,  just  as  a  foot  or  an 
inch  is  the  same,  and  would  still  have  been  the 
same  to  all  men  within  the  jurisdiction,  no  mat- 


SUMMARY  OF  VALUE  THEORY.  131 

ter  if  they  had  been  chosen  ten  or  fifty  per  cent 
longer  or  shorter  than  was  actually  the  case. 
They  would  have  answered  their  purpose  pre- 
cisely as  well  as  they  do  now. 

I  speak  advisedly  when  I  say  that  standards 
of  length  were  arbitrarily  selected.  While  it  is 
true  that  the  French  savants  tried  to  derive  their 
metre  from  a  fixed  physical  dimension  of  the 
earth,  a  ten  millionth  part  of  a  meridian  quad- 
rant, that  is  to  say,  a  line  on  the  earth's  surface 
from  the  pole  straight  down  to  the  equator,  the 
selection  of  a  ten  millionth  part  of  this  was 
strictly  arbitrary;  they  might  as  well  have  se- 
lected a  nine  or  a  twelve  millionth,  instead  of  a 
ten  millionth  part.  And  moreover,  it  is  now 
asserted  that  the  French  engineers,  who  spent 
seven  years,  from  1791  to  1798,  measuring  the 
distance  from  Dunkirk  in  Northern  France  to 
Barcelona  in  Spain,  and  from  these  nine  and  a 
half  degrees  of  the  quadrant  calculated  the  rest 
of  the  distance  from  the  equator  to  the  pole,  after 
all  failed  to  find  the  accurate  measure  of  this 
distance. 

According  to  later  calculations  of  Captain 
Clark,  meridians  vary  in  length,  and  the  one  at 
Paris,  practically  identical  with  the  one  at  Dun- 
kirk, he  found  to  be  472  metres  longer  than  cal- 
culated by  the  French.  But  this  is  of  no  earthly 
importance,  and  for  all  practical  purposes  the 
French  engineers  might  have  saved  their  seven 
years  of  labor,  and  arbitrarily  chosen  any 
convenient  length,  called  it  a  metre,  and 
prepared  their  precise  standard  bars  to  em- 
body this  length,   for  future  reference  and  for 


132  ULTIMACY  IN  VALUE. 

copying,  after  the  same  had  received  proper  legal 
sanction.  Thus  we  see  that  in  two  ways  the 
metre  is  an  arbitrary  choice  of  length  unit.  In 
the  first  place  because  it  was  an  arbitrarily  chosen 
fraction  of  a  supposed  physical  dimension  of  the 
earth;  and  in  the  second  place  because  it  is  a 
practical  impossibility  to  measure  with  certainty 
and  accuracy  such  a  dimension  of  the  earth ;  and 
as  it  now  appears,  the  men  who  attempted  to  do 
so,  failed  in  their  object.  "We  have  the  opinion 
of  several  of  the  highest  authorities  in  England 
to  the  effect  that  there  is  no  advantage  in  adopt- 
ing a  unit  of  measure  founded  in  nature  over 
one  of  arbitrary  character."  H.  W.  Chrisholm 
in  Weights  and  Measures,  page  97.  This  is  un- 
doubtedly true,  and  if  the  establishment  of  the 
metric  system  by  the  French  had  been  deferred 
until  the  present  day,  the  French  savants  would 
no  doubt  have  chosen  36  English  inches,  or  per- 
haps better  still  30  English  inches,  as  their  arbi- 
trary unit,  and  called  that  length  a  metre.  This 
would  have  made  the  French  and  the  English 
system  of  length  measurement  more  readily  com- 
mensurable and  convertible.  One  decimeter 
would  then  have  equaled  three  inches,  one  centi- 
metre three-tenths  of  an  inch,  one  yard  would 
have  been  equal  to  one  and  two-tenths  of  a  metre, 
and  one  metre  would  equal  two  and  one-half 
feet  or  30  inches,  instead  of  39.37079  inches  as 
at  present  is  the  case,  a  very  cumbersome  frac- 
tion in  all  work  of  converting  English  into  French 
measure  and  vice  versa. 

The    English    standard    yard    is    theoretically 
also  an  arbitrary  selection,  though  regard  was 


SUMMARY  OF  VALUE  THEORY.  133 

had  to  the  measures  of  length  at  that  time  com- 
monly in  use  in  England,  and  which  custom  had 
already  reduced  to  an  approximate  uniformity. 
The  yards  then  in  use  were  compared,  and  the 
average  length  thus  found  was  adopted  as  the 
precise  length  of  a  yard,  and  embodied  in  a  care- 
fully prepared  standard  bar,  legalized,  placed  in 
the  custody  of  the  Exchequer  Department,  and  a 
number  of  exact  copies  made  and  sent  to  various 
places  for  reference,  both  in  England  and  in  other 
countries.  Tw^o  of  these  were  in  1855  sent  to 
the  United  States,  and  have  since  been  in  the 
keeping  of  the  Coast  Survey  Bureau.  The 
French  established  an  entirely  new  system,  with 
new  names  for  their  units;  it  was  in  France  a 
time  of  upheaval  and  change.  No  such  condi- 
tions prevailed  in  England,  and  the  English 
merely  gave  precision  to  the  old  measures,  re- 
tained the  old  names,  and  caused  no  inconveni- 
ence or  hardships. 

Similarly,  in  deciding  on  an  arbitrary  value 
designation  of  an  hour's  standard  work,  and 
finding  for  this  an  expression  in  the  current 
money  and  value  medium,  regard  may  be  had 
to  the  prevailing  money  equivalents  of  labor  in 
various  lines  of  work,  the  same  averaged  up,  and 
a  convenient  approximation  to  that  average  des- 
ignated as  the  money  value  of  an  hpur's  standard 
labor  in  every  line  of  useful  work.  In  this  way 
there  will  be  the  least  amount  of  friction  and 
difficulty,  both  in  the  transition  to  the  new  sys- 
tem and  in  maintaining  exchange  of  products 
with  foreign  lands.  It  may  even  be  that  the 
labor    cost    of    producing    gold,    the    generally 


134  ULTIMACY  IN  VALUE. 

accepted  money  material,  will  be  taken  into  con- 
sideration in  designating  the  money  value  of  a 
.day's  or  an  hour's  work  in  general.  But  1  do 
not  consider  this  important,  and  I  explicitly  want 
to  keep  the  money  idea  out  of  my  value  theory, 
as  being  something  distinctly  subordinate  and 
secondary,  a  minor  detail,  easily  settled  when 
once  the  main  question  has  been  solved,  the  ques- 
tion of  value,  its  nature,  essence,  and  origin. 

Whatever  money  designation  for  the  value  of 
an  hour's  standard  labor  may  be  chosen,  20  cent, 
25,  30,  40,  50,  or  60  cent,  it  should  be  some 
amount  convenient  for  computation,  and  involv- 
ing no  fractions ;  and  this  sum,  whichever  it  may 
be,  would  simply  indicate  a  nominal  value,  a 
mere  money  name  for  the  purchasing  power  of 
the  labor  hour,  since  the  purchasing  power  of 
the  labor  hour  in  reality  would  be  an  hour's  labor 
product,  irrespective  of  the  nominal  amount  in 
money.  The  money  equivalent  of  an  hour's 
standard  work,  or  the  rate  of  payment,  once 
decided,  would  remain  constant  like  the  length 
of  a  yard,  but  the  purchasing  power  of  the  labor 
hour  or  of  its  money  compensation,  as  measured 
in  products,  would  increase  with  the  general 
progress  in  science,  technique,  and  invention, 
with  the  increase  in  general  efficiency,  and  with 
the  elimination  of  waste  and  of  mutually  ob- 
structive rivalries.  In  other  words,  the  purchas- 
ing power  of  an  hour's  standard  labor,  as  ex- 
pressed in  commodities,  will  increase  as  the 
productivity  of  labor  increases.  The  rewards  of 
increased  effectiveness,  due  to  new  discoveries, 
inventions,  and  new  processes,  would  not  be  re- 


SUMMARY  OF  VALUE  THEORY.  135 

stricted  to  the  particular  lines  of  industry  in 
which  these  inventions  and  improvements  are 
made,  but  would  automatically  spread  to  all  the 
ultimate  consumers  of  the  product  in  question; 
that  means,  the  benefit  would  spread  practically 
to  every  member  of  the  nation. 

Still  more  concretely  stated,  the  wages  of 
standard  labor  would  remain  the  same,  but  the 
selling-  price,  to  the  ultimate  consumer,  of  every 
commodity  and  convenience  would  continually 
grow  less,  as  the  world  advanced  in  productive 
power.  This  would  hold  true  also  for  the  prod- 
ucts of  the  farm,  as  agriculture  is  becoming  more 
and  more  a  science;  with  this  proviso,  however, 
that  there  may  be  occasional  upward  fluctuations 
of  prices  for  farm  products,  due  to  unfavorable 
seasons  and  consequently  diminished  crop  out- 
put. This  might  also  apply  to  fishing,  and  per- 
haps to  some  other  lines  of  work,  in  which,  due 
to  diminishing  returns,  the  price  of  products 
would  automatically  go  up.  And  in  all  such 
cases  the  loss  would  not  fall  only  or  chiefly  upon 
that  particular  branch  of  labor,  but  would  be 
automatically  distributed  over  the  entire  com- 
munity. This  is  as  it  should  be — mutual  insur- 
ance, bearing  one  another's  burden. 

Thus  then  a  solution  of  the  value  problem  is 
found.  The  ultimate  in  value  designation  is 
arbitrarily  selected,  like  a  unit  of  length,  the  yard 
or  the  metre,  and  assigned  for  an  hour's  useful 
labor  of  standard  efficiency;  and  this  labor  hour 
becomes  the  value  unit  and  value  measure  of 
every  article  of  exchange.  If,  say,  50  cents  were 
chosen  as  a  suitable  value  expression  for  one 


136  ULTIMACY  IN  VALUE. 

hour's  standard  work,  then  any  article  having 
embodied  in  it,  all  told,  four  hours  of  such  work, 
from  the  first  raw  material  to  the  last  handling 
and  passing  to  the  consumer,  would  be  worth 
two  dollars,  and  the  selling  price  to  him  would 
be  two  dollars  plus  a  percentage  to  take  the  place 
of  general  taxes.  And  thus  the  perplexing  value 
problem  becomes  exceedingly  simple,  almost  too 
simple  for  belief;  providing,  dear  reader,  you 
accept  as  a  fundamental  principle  the  proposition 
of  equal  compensation  for  all  kinds  of  useful 
work  of  standard  efficiency. 

I  have  in  my  reasoning  accepted  various  fun- 
damental tenets  of  standard  economists,  and 
merely  carried  them  to  logically  final  conclusions, 
conclusions  for  which  their  times  were  not  ripe, 
and  which  they  perhaps  for  that  reason  were 
unable  to  discern.  I  have  accepted  Adam  Smith's 
labor  cost,  and  labor  pain  cost  doctrine  of  value, 
and  carried  the  same  unswervingly  to  a  final  con- 
clusion, whereas  Adam  Smith  stopped  short  and 
practically  did  abandon  it.  He  said  that  the 
original  cost  and  first  price  of  anything  is  the  toil 
and  trouble  of  producing  it,  and  that  its  value 
lies  in  the  toil  and  trouble  the  possession  thereof 
saves  us.  I  have  consistently  adhered  to  this 
thought,  and  insisted  that  irksomeness,  the  labor 
pain  endured  and  felt  in  the  back  and  muscles  of 
one  man  or  woman,  are  entitled  to  the  same  con- 
sideration and  value  estimate  as  the  pain  felt  in 
another  man's  back,  or  muscles,  or  head.  I  have 
likewise  accepted  the  doctrine  of  the  utility 
school  of  economists,  accepted  utility  as  an  in- 
dispensable condition  of  value.    But  I  have  com- 


SUMMARY  OF  VALUE  THEORY.  137 

bined  these  two  ideas  instead  of  rejecting  one 
for  the  other,  since  they  are  so  closely  related  as 
to  be  almost  identical.  For  what  is  utility,  or  in 
what  does  it  consist,  but  in  saving  us  from  labor 
pain,  saving  the  possessor  of  the  useful  thing 
from  the  pain  or  distress  of  unsatisfied  wants, 
unsupplied  need,  or  from  the  labor  pain  he  would 
have  to  endure  in  providing  or  producing  the 
needed  thing  by  his  own  labor.  This  labor  pain, 
according  to  Adam  Smith,  is  the  original  first 
cost  and  first  price  of  any  produced  thing,  and 
this  price,  I  insist,  is  equal  hour  for  hour,  and 
passes  over  into  the  !thing  produced,  becomes 
embodied  therein  and  constitutes  its  value,  pro- 
viding, always,  the  thing  is  useful,  possesses  de- 
sirability, and  that  the  labor  which  produced  it 
was  of  standard  efficiency. 

I  have  also  accepted,  as  far  as  it  applies,  the 
doctrine  of  the  Austrian  school,  that  value  is  de- 
termined by  subjective  imputation;  in  other 
words,  that  the  value  of  a  thing  is  determined  by 
whatever  value  estimate  men  generally  put  upon 
that  thing,  hence,  in  this  sense,  value  is  a  psychic 
phenomenon  or  fact.  Granting  that  value  in  this 
aspect,  the  utility  aspect,  depends  upon  men's 
estimate,  it  has  been  my  complaint  that  these 
estimates  are  made  in  gross  ignorance,  often 
are  utterly  absurd  and  foolish,  and  incredibly 
unjust.  And  I  have  pleaded  for  saneness  and 
common  sense  in  value  estimates,  have  insisted 
that  it  is  the  duty  and  the  function  of  thinkers 
and  leaders  of  men,  of  philosophers  and  teachers, 
and  especially  of  economists,  to  enlighten  and  in- 
struct the  world  for  the  making  of  true  and  ra- 


138  ULTIMACY  IN  VALUE. 

tional  value  estimates;  and  to  put  the  value  esti- 
mate primarily  on  the  labor  that  produces,  rather 
than  on  the  thing  produced.  My  whole  argu- 
ment has  been  to  convince  men  of  the  justice  and 
the  reasonableness  of  estimating  at  equal  value 
all  useful  labor  of  standard  efificiency.  This  once 
accepted,  then  the  value  of  things  becomes  some- 
thing definite  and  ascertainable,  a  mere  summing 
up  of  the  hours  of  standard  labor  embodied  in 
any  given  article,  instead  of  the  blindly  groping, 
haphazard,  absurd,  juggled,  or  whimsically 
false  estimate  which  at  present  it  generally  is. 

The  following  eight  statements  now  compactly 
summarize  my  value  theory : 

I.  Economic  value  is  the  quality  or  capability 
of  a  thing,  directly  or  indirectly,  to  satisfy  legiti- 
mate human  wants  or  desires. 

II.  Economic  value  is  the  product  of  human 
labor,  physical  or  mental,  embodied  in  concrete 
things,  for  direct  or  indirect  use  in  satisfying  le- 
gitimate wants  and  desires  that  tend  to  preserve 
or  enlarge  human  life. 

III.  Utility,  or  usefulness,  is  but  another  name 
for  capability  to  satisfy  human  wants  or  desires. 
Utility  therefore  is  the  essence  of  value. 

IV.  To  embody  utility  or  value  in  a  thing 
requires  human  labor;  and  this  involves  sacrifice 
of  leisure  and  ease,  and  necessitates  the  steady 
application  of  mental  or  bodily  energy  during 
appropriate  periods  of  time.  This  application  of 
energy  is  called  labor  burden  or  labor  pain;  it 
is  the  original  value  equivalent,  and  is  quantita- 
tively designated  by  time  of  duration.    The  labor 


SUMMARY  OF  VALUE  THEORY.  139 

hour   therefore   is   the  quantitative  measure  of 
value. 

V.  But  since  some  labor  may  be  misapplied 
or  inefficient  as  a  producer  of  value,  it  is  neces- 
sary to  specify  that  this  value-measuring  labor 
be  applied  to  ends  of  usefulness,  and  that  it  be  of 
standard  efficiency. 

VI.  Since  labor  implies  the  expenditure  of 
energy  and  life  force;  and  since  one  man's  life 
and  vitality  is  as  dear  and  as  valuble  to  him 
as  another's  is  to  that  other,  it  is  self-evident  that 
one  man's  sacrifice  in  labor  pain  must  be  ac- 
counted equal  with  that  of  another  man's,  and 
therefore  entitled  to  the  same  consideration  and 
recompense.  Hence  we  cannot  escape  the  con- 
clusion that  one  man's  labor  pain  endured  for  an 
hour,  is  the  exact  equivalent  for  another  man's 
labor  pain  endured  for  an  equal  length  of  time. 
It  therefore  follows  that  all  useful  work,  in  jus- 
tice and  on  principle,  should  be  compensated  alike, 
hour  for  hour,  provided  such  work  is  of  standard 
efficiency. 

VII.  The  hour,  or  time-length,  of  standard 
labor,  then  is,  or  should  be,  the  actual  value  de- 
terminant, and  should  measure  the  economic 
value  of  every  producible  article  of  exchange. 

VIII.  This  labor  hour  value  may  be  trans- 
lated from  a  time  expression  into  the  terms  of 
some  current  value  medium,  or  medium  of  ex- 
change, called  money;  and  this  money  equivalent 
of  the  standard  labor  hour  can  be  arbitrarily 
chosen  at  some  appropriate  figure,  and  with  rea- 
sonable approximation  to  the  labor  time  value  of 
the  money  material  used   for  the   money  units 


140  ULTIMACY  IN  VALUE. 

or  larger  coins,  insofar  as  a  money  material  of 
intrinsic  value  is  deemed  advisable. 

This  summarizes  the  value  theory  presented  in 
my  book. 


In  statement  VIII,  I  have  assumed  a  money 
medium  or  currency  in  which  to  give  convenient 
expression  to  the  value  of  an  hour's  standard  la- 
bor, or  in  other  words,  to  express  the  labor  hour 
as  a  money  quantity.  Strictly  speaking  this  is 
not  necessary,  but  it  may  be  expedient;  and  I 
have  inserted  it  in  order  to  assist  the  reader  in 
grasping  this  value  concept,  and  let  him  feel  that 
he  has  something  tangible  and  concrete  to  lay 
hold  on,  as  explained  a  few  pages  back.  Instead  of 
assuming  such  a  money  expression^  some  frac- 
tional part  of  a  dollar,  as  being  the  money  value 
of  an  hour's  standard  labor,  let  us  assume  the 
hour  ticket  or  bill  to  be  the  unit  of  value  in  a 
new  money  system,  consisting  of,  say,  one-hour 
bills,  two-hour  bills,  five-hour  bills,  ten-hour  bills, 
and  so  on ;  supplemented  by  a  fractional  cur- 
rency of  5-minute  checks  or  slips  or  stamps,  10- 
minute  stamps,  1 5-minute,  and  30-minute  stamps. 
And  there  is  nothing  in  the  world  to  hinder  us 
from  further  assuming  that  these  minute  stamps 
may  be  put  upon  round  pieces  of  metal,  nickel, 
or  silver,  just  like  our  present  5-cent,  10  and  25- 
cent  coins  now  in  use.  And  the  hour  and  two- 
hour  check  may  be  stamped  on  pieces  of  silver, 
the  five  and  the  ten-hour  check  upon  pieces  of 
gold ;  just  as  is  our  present  gold  and  silver  money, 
and  circulating  precisely  as  does  the  money  of 


SUMMARY  OF  VALUE  THEORY.  141 

today.  Thus  you  would  have  the  conventional 
money  and  the  labor-time  check  absolutely  merged 
and  identical  one  with  the  other.  What  is  to 
hinder  this?  Nothing  whatever.  Nor  is  there 
anything  to  hinder  the  adoption  of  a  combination 
of  the  old  with  the  new  system,  so  as  to  retain 
the  decimal  features  of  the  present  system  for 
convenience  in  computation  and  for  the  smallest 
fractional  denomination. 

I  have  said  that  this  essay  of  mine  is  a  treatise 
on  the  "value"  problem;  it  does  not  pretend  to 
cover  the  whole  field  of  economics;  and  I  have 
repeatedly  said  that  I  shall  not  deal  with  the  ques- 
tion of  "money"  or  the  medium  of  exchange. 
Nevertheless,  the  suggestions  given  here,  and  in 
statement  VIII,  present  the  fundamental  facts 
and  basic  principles  upon  which  a  rational  me- 
dium of  exchange  or  money  system  may  be 
worked  out. 

Some  points  have  been  too  briefly  discussed  in 
these  chptcrs;  they  will  be  taken  up  in  Part  III, 
together  with  a  few  additional  matters.  I  shall 
now  close  this  chapter  with  one  more  appeal  to 
the  reader's  heart  and  sense  of  fairness  in  be- 
half of  the  principle  of  equal  compensation. 

Reader,  whoever  you  be,  but  especially  if  you 
are  a  skilled  mechanic  and  a  union  man,  I  ask  you 
to  read  once  more  the  propositions  set  forth 
above,  to  establish  a  new  money  system,  consist- 
ing of  hour  checks  or  bills  and  minute  stamps 
instead  of  dollars  and  cents,  and  try  to  grasp  the 
significance  of  that  proposition.     Then  call  to 


142  ULTIMACY  IN  VALUE. 

mind  the  words  of  Scotland's  ploughman  bard, 
Robert  Burns,  who  wrote 

Then  let  us  pray  that  come  it  may 
As  come  it  will  for  all  that, 
That  man  to  man  the  world  o'er, 
Shall  brothers  be  for  all  that. 
And   think  then   of   that   "parliament  of   man" 
which  surely  will  meet  in  every  advanced  nation 
ere  many  years,   and   in   which   all  manner  of 
labor  will  be  represented  in  proportion  to  their 
number   and  real   importance,   to  deliberate  on 
the  establishment  of  industrial  justice  within  their 
respective  countries.     And  suppose  then,  what 
is  more  than  likely,  that  such  a  parliament  de- 
cides to  establish  the  labor  hour  money  system, 
which  implies  the  payment  of  an  hour  check  for 
every  hour's  work  of  standard  efficiency.     Is  it 
to  be  supposed  that  anyone  would  stand  up  in 
such  an  assembly  and  say:     You  may  pay  Tom 
or  Dick  an  hour  check  for  an  hour's  work,  but 
my  name  is  Harry  and  I  insist  upon  getting  two 
or  three  hour  checks  for  an  hour's  work  of  mine. 
Is  it  to  be  supposed  that  any  man  would  have  the 
impudence  to  make  such  a  demand? 
Reader,  would  you? 

For  all  that  and  for  all  that, 
It's  coming  yet  for  all  that, 
That  man  to  man  the  world  o'er, 
Shall  brothers  be  for  all  that. 


PART  III. 

APPLICATION. 

Chapter  IX. 

Application  of  Value  Theory.    Some  Objec- 
tions Answered. 

It  has  been  shown  in  chapter  II.  that  econ- 
omists have  so  far  not  estabHshed  a  theory  of 
value  which  is  generally  accepted  as  satisfac- 
tory and  true;  also  that  several  of  the  later 
writers  on  economics  virtually  confess  value  to 
be  an  unsolved  problem  in  economics.  The  pres- 
ent writer  thinks  he  has  solved  this  problem  by 
combining  the  labor  cost  doctrine  with  the  util- 
ity doctrine  and  giving  both  a  wider  and  a  deeper 
meaning;  and  that  by  specifying  useful  labor  of 
standard  efficiency  he  has  reduced  the  value  de- 
termining labor  to  that  homogeneity  which  is 
necessary  for  a  common  denominator  of  value. 
I  have  enlarged  upon,  and  emphasized,  Adam 
Smith's  doctrine,  that  labor,  the  toil  and  trouble, 
or  labor  pain,  of  producing  a  thing,  is  the  original 
cost  and  purchase  price  of  such  thing,  and  that 
conversely  this  labor  pain  is  what  such  a  thing 
essentially  is  worth  in  further  exchanges.  I  have 
dwelt  upon  this  and  repeated  it  time  and  again. 
For  right  here  lies  the  difficulty  that  most  men 
will  experience  in  accepting,  and  indeed  in  com- 
prehending, the  idea  that  value  and  labor  pain 
are  true  equivalents;  in  fact,  we  may  say  they 
are  but  two  names  for  the  same  thing. 

143 


144  APPLICATION  OF  VALUE  THEORY. 

It  will  quite  readily  be  granted  that  the  pain, 
labor  pain,  in  Smith's  back  and  muscles,  or  head 
if  you  please,  is  entitled  to  the  same  considera- 
tion as  is  the  labor  pain  in  Johnson's  back  and 
muscles  or  head;  and  that  the  sacrifice  of  leisure 
and  ease  of  the  two  is  to  be  taken  as  equal,  hour 
for  hour.  But  that  this  naturally  makes  the 
value  of  Smith's  and  Johnson's  labor  equal,  and 
their  labor  products  equal  in  value,  that  will  not 
readily  be  admitted,  even  when  it  is  specified  that 
both  are  engaged  in  useful  work  and  both  show 
standard  efficiency;  because  this  is  such  an  un- 
usual idea,  so  contrary  to  the  world's  universal 
habit  of  thought.  Verily,  it  is  an  unusual  idea,  as 
unusual  as  absolute  truthfulness,  uprightness, 
and  as  a  modest  estimate  of  self  is  unusual. 

He  that  through  ages  has  been  downtrodden, 
enslaved  and  made  to  perform  hard  labor  at  the 
meanest  compensation,  him  the  world  has  in 
course  of  time  come  to  look  upon  with  contempt, 
and  as  a  man  of  very  small  value,  and  his  labor,  as 
well  as  his  labor  product,  has  been  regarded  as  of 
correspondingly  low  value;  while  he  who  by 
shrewdness  or  by  force  of  combination  and  special 
privilege  has  been  enabled  to  exact  a  high  price 
for  his  labor  and  his  products,  came  in  time,  for 
that  very  reason,  to  be  considered  a  very  valuable 
man,  and  his  work  has  enjoyed  a  high  value  esti- 
mate. This,  of  course,  is  not  granting  equal  con- 
sideration for  the  labor  pain  of  all  men;  and  to 
this  evidently  no  one  gave  a  thought  in  times 
past,  though  I  believe  the  world  is  now  a  little 
more  inclined  to  estimate  one  man's  labor  pain 
equally  with  another's.    But  that  equality  of  labor 


SOME  OBJECTIONS  ANSWERED.  145 

pain  also  implies  equal  value  of  the  labor  and  of 
its  product,  when  that  labor  is  useful  and  of  stand- 
ard efficiency,  that  is  as  yet  perceived  by  only  a 
few. 

This,  however,  is  of  the  utmost  importance,  is 
fundamental  to  my  entire  economic  reasoning  and 
to  the  value  theory  here  presented;  and  is  abso- 
lutely essential,  I  claim,  to  the  world's  orderly 
progress,  as  well  as  to  world  peace,  and  to  hu- 
man welfare. 

Realizing  how  difficult  it  will  prove  for  the 
average  man  to  grasp  and  to  understand  the  rea- 
sonableness of  all  this,  I  have  devoted  the  larger 
part  of  my  book  to  endeavors  at  making  this  plain, 
and  to  convince  men  of  the  feasibleness  as  well 
as  of  the  equitableness  of  this  equal  compensa- 
tion idea.  I  have  contended  that  this  idea  and 
the  value  theory  based  thereon  hold  true,  whether 
we  assume  private  or  public  ownership  of  land 
and  natural  resources,  privately  owned  or  col- 
lective capital,  a  commodity  money  or  a  token 
money  (labor  hour  checks).  I  have  also  con- 
tended that  the  world  is  even  now,  under  the 
prevailing  economic  system,  slowly  gravitating 
toward  approximate  equality  of  compensation 
for  industrial  labor;  though  that  movement  may 
be  so  slow  and  so  unconsciously  followed  as  to 
go  on  practically  unnoticed.  I  have  further  con- 
tended that  the  ever  recurring  disputes  and 
strikes  about  wages  cannot  be  tolerated  forever; 
that  a  way  of  settlement  must  be  found  which 
settles  these  disputes  once  and  for  all;  and  that 
the  only  settlement  of  these  disturbances,  and  of 
this  industrial  war,  is  the  establishment  of  equal 


146  APPLICATION  OF  VALUE  THEORY. 

compensation  for  all  useful  work  of  standard 
efficiency. 

All  this  does  not  necessarily  imply  a  socialized 
state;  it  applies  in  great  measure  to  present  com- 
petitive society  with  its  private  enterprise  and 
initiative;  and  it  applies  still  more  largely  to  any 
transition  stage  toward  a  socialized  state,  which 
unquestionably  the  future  will  bring;  while  a 
socialized  state  without  this  equal  compensation 
would  be  the  merest  travesty.  This  equal  com- 
pensation for  useful  labor  of  standard  efficiency 
is  the  very  essence  of  that  equality  and  frater- 
nity of  which  reformers  have  been  dreaming,  and 
toward  which  humanity  has  painfully  and  blindly 
been  groping  throughout  the  ages.  It  is  also  more 
readily  comprehended  in  connection  with  a  social- 
ized state,  and  by  people  whose  sentiments  incline 
in  that  direction,  than  by  those  whose  thoughts 
are  too  firmly  anchored  to  the  old  institutions. 

As  an  illustration  of  this  I  may  cite  the  objec- 
tion made  by  a  neighbor  who  had  difficulty  in 
accepting  the  equal  compensation  idea,  and  who 
could  not  see  how  such  a  scheme  could  possibly 
be  applied  in  practice.  Suppose,  said  he,  I  am 
a  farmer  and  I  need  the  labor  help  of  eight  men ; 
and  suppose  two  of  these  are  capable,  efficient 
workers,  on  whose  labor  I  profit,  four  are  indiffer- 
ently good,  I  neither  gain  nor  lose  on  them,  but 
the  remaining  two  are  no  good  at  all,  on  them 
I  lose;  how  could  I  in  justice  pay  all  the  same 
wages  ? 

Well,  said  I,  your  supposed  case  is  not  in  point, 
for  it  disregards  the  distinctly  specified  condi- 
tion which  I  have  emphasized  time  and  again, 


SOME  OBJECTIONS  ANSWERED.  147 

that  the  labor  is  to  be  of  standard  efficiency. 
The  two  "no  good"  fellows  would  be  kept  in  the 
apprentice  class  until  they  come  up  to  standard 
ethciency,  not  till  then  would  they  be  entitled  to 
standard  pay.  There  would  be  this  difference 
however  in  the  cases  of  such  as  between  then  and 
now,  that  now  they  are  set  adrift  to  shift  for 
themselves;  to  grope  and  blunder  through  life, 
sinking  lower  and  lower  until  they  become  down 
and  outs;  whereas,  under  a  sane  and  humane 
regime  they  would  be  assisted  with  instruction, 
advice,  and  guidance,  and  perhaps  transferred 
to  other  work,  to  the  kind  of  work  in  which 
they  had  the  best  chance  of  becoming  proficient 
and  of  reaching  standard  efficiency.  Thus  they 
would  be  encouraged ;  the  helping  hand  of  society 
would  be  extended  to  assist  them  to  find  their  feet, 
instead  of  abandoning  them  to  their  fate  and  to 
the  unfortunate  consequences  of  their  unpropi- 
tious  heredity,  which,  as  pointed  out  before,  is 
their  misfortune,  not  their  willful  choice. 
Furthermore,  the  case  is  not  supposable  in  a  ra- 
tionally organized  human  society,  in  a  socialized 
state,  such  as  we  surely  shall  have  ere  long,  where 
you,  good  neighbor,  cannot  be  supposed  to  have 
monopolized  eight  times  as  much  land  as  your- 
self can  cultivate,  and  to  have  eight  of  your 
fellow-mortals  come  to  your  door  begging  for 
work,  they  having  been  kept  out  of  their  share 
in  the  soil,  the  common  inheritance  of  the  race. 
It  will  readily  be  seen  that  taken  in  conjunc- 
tion with  a  socialized  state,  or  merely  with  a 
consciousness  that  such  a  state  is  even  now  in 
process  of  development,  the  equal  compensation 


148  APPLICATION  OF  VALUE  THEORY. 

idea  becomes  much  easier  of  comprehension  and 
of  acceptance.  The  fundamental  principle  of  my 
value  theory,  as  repeatedly  given,  is  concretely 
stated  in  this  proposition  or  demand:  Equal 
compensation,  hour  for  hour,  for  all  kinds  of 
useful  work  of  standard  efficiency,  male  or  fe- 
male. But  the  mere  statement  of  such  a  demand 
would  by  no  means  carry  conviction  to  the  mind 
of  the  reader.  It  would  be  brushed  aside  at  first 
sight  and  dismissed  as  absurd,  because  it  is  so 
unusual  and  so  contrary  to  general  notions.  And 
it  must  therefore  be  repeated  and  restated  time 
and  again,  and  be  supported  by  all  the  resource 
of  argument  its  advocate  can  command.  It  was 
therefore  necessary  to  devote  a  large  part  of  my 
book  to  the  effort  of  convincing  the  reader  that 
this  demand  and  this  idea  of  equal  compensation 
for  all  kinds  of  work  of  standard  efficiency  is 
right  and  reasonable,  fair  and  desirable,  neces- 
sary and  inevitable.  For,  as  repeatedly  stated, 
upon  the  acceptance  of  this  principle  of  equal 
compensation  rests  my  value  theory;  and  if  such 
acceptance  does  not  ensue  then  my  value  theory 
stands  rejected  and  my  book  becomes  a  failure. 
In  such  case  I  can  only  hope  that  there  may  come 
another,  who  possesses  the  necessary  power  of 
exposition  and  persuasion,  of  lucid  and  convinc- 
ing presentation,  who  will  succeed  where  I  have 
failed. 

I  shall  now  try  to  meet  various  objections, 
and  offer  tentative  solutions  of  some  of  the  many 
practical  difficulties  that  naturally  will  suggest 
themselves  to  the  thoughtful  reader.  I  am  aware 
of  the  fact  that  these  difficulties  are  many  and 


SOME  OBJECTIONS  ANSWERED.  149 

perplexing,  and  that  some  of  them  are  so  stu- 
pendous as  to  seem  unsolvable.  But  it  is  not 
my  task  to  go  into  details  of  arrangement  and 
adjustment;  these  will  necessarily  have  to  be  de- 
termined as  they  present  themselves  in  the  course 
of  societary  development  along  the  lines  of  the 
new  economic  principles  and  theories  here  pre- 
sented. My  task  is  primarily  to  present  those  eco- 
nomic principles,  particularly  a  value  theory,  upon 
which  the  new  era  economics  is  to  be  based,  and 
in  accordance  with  which  the  future  society  must 
be  organized. 

Let  me  also  remind  the  reader  that  the  value 
theory  here  presented  is  distinctly  restricted  to 
economic  values,  to  the  values  of  economic  prod- 
ucts and  services;  but  is  not  concerned  with  the 
determination  of  moral,  artistic,  or  esthetic  values- 
Professional  work,  which  does  not  more  or  less 
directly  enter  into  economic  services  or  products 
of  exchange,  is,  strictly  speaking,  not  comprised 
in  the  proposed  system  of  evaluation,  though 
much  of  the  same  will  by  analogy  and  associ- 
ation be  affected  and  influenced  by  value  notions 
regarding  industrial  labor.  My  value  theory 
is  concerned  with  and  applies  to  strictly  economic 
labor  and  labor  products,  those  things  that  make 
up  the  material  essentials  of  life,  summed  up  as 
food,  clothing,  and  shelter,  and  the  necessary 
transportation  incidental  thereto.  Besides  the 
primary  effect  of  this  value  theory,  of  putting 
the  fairest  and  most  equitable  valuation  on  prod- 
ucts and  on  labor  that  limited  human  wisdom  can 
devise,  it  has  the  simultaneous  secondary  effect 
of  automatically  bringing  about  a  just  distribu- 


,150  APPLICATION  OF  VALUE  THEORY. 

tion  of  the  nation's  annual  wealth  product,  and 
of  so  distributing  the  nation's  domestic  purchas- 
ing power  as  to  synchronize  consumption  with 
production  to  any  desired  degree  of  closeness. 
That  is  to  say,  consumption  will  keep  step  with 
production,  as  closely  as  may  be  deemed  advis- 
able. Gluts  of  the  commodity  market,  and  conse- 
quent stagnation  of  production  with  resulting 
unemployment  and  distress,  such  as  periodically 
afflict  present  society,  will  be  effectually  prevented. 
This  secondary  effect  is  of  course  of  the  ut- 
most importance.  In  fact,  it  is  the  prime  object 
of  the  entire  proposal,  since  it  is  that  which  shall 
abolish  poverty  and  slums,  put  an  end  to  pre- 
cariousness  of  employment  and  enforced  idleness, 
and  yield  to  all  honest  and  useful  labor  its  true 
and  legitimate  reward.  With  these  things  this 
value  theory  is  concerned,  and  for  such  ends  has 
it  been  been  reasoned  out  and  formulated.  This 
object  is  of  paramount  importance  to  the  human 
race  and  should  outweigh  all  difficulties,  how- 
ever great,  that  have  to  be  met  in  accomplish- 
ing the  same.  It  is  then  a  proposition  in  the  inter- 
est of  democracy,  of  the  common  man,  the  ordi- 
nary useful  worker  and  citizen.  It  is  not  put 
forth  in  behalf  of  the  uncommon  man,  he  who  is, 
or  fancies  himself  to  be,  a  genius,  an  artist,  poet, 
or  philosopher.  However  desirable  and  worthy 
of  appreciation  the  work  of  such  men  may  be, 
it  stands  outside  the  realm  of  economics  proper, 
and  it  cannot  be  evaluated  on  the  labor  hour  prin- 
ciple. These  people  form  a  province  of  their 
own,  they  and  their  work  must  be  judged  by 
standards   apart   from   economics.     They   have 


SOME  OBJECTIONS  ANSWERED.  151 

nothing  to  do  with  the  daily  wants  of  all  men  for 
food,  clothing,  and  shelter,  the  essential  neces- 
saries of  life.  They  belong  in  the  realm  of  orna- 
mentals, luxuries,  fancies,  w^iims,  recreations, 
and  mere  pleasures ;  and  the  value  of  their  work 
is,  generally  speaking,  not  measurable  in  terms 
of  material  things.  He  who  ploughs  and  reaps, 
hews  wood  or  digs  coal,  builds  houses,  streets, 
sewers,  canals,  or  roads,  sweeps  streets,  washes 
clothes,  or  makes  any  useful  thing,  he  creates 
real  value;  of  this  there  can  be  no  doubt,  and 
his  claim  for  compensation  is  not  to  be  questioned. 
But  he  who  paints  a  picture,  writes  a  poem  or  a 
book,  as  this  one  of  mine  for  instance,  he  pro- 
duces work  which  may  be  of  surpassing  worth, 
or  it  may  be  rubbish.  Who  shall  decide  that? 
Economics  cannot  determine  that,  and  assign  him 
a  compensation;  his  labor  and  his  product  lie 
outside  the  proper  province  of  economics.  Let 
his  be  a  labor  of  love,  largely  performed  during 
leisure  hours,  and  let  him  be  content  if  he  reaps 
a  pecuniary  reward,  and  also  be  content  if  re- 
ward is  denied.  Much  of  the  best  work  in  art 
and  literature,  as  well  as  in  reform  and  philan- 
thropy has  always  been  done  on  those  very  terms 
and  is  so  done  in  our  day.  The  reward  for  non- 
industrial  work  was  considered  at  some  length 
in  chapter  lY,  and  the  reader  is  referred  to  those 
pages. 

But  I  am  to  meet  some  of  the  objections  that 
naturally  are  to  be  expected,  and  I  shall  consider 
first  the  most  weighty  and  important  of  these, 
namely,  the  objection  that  such  a  scheme  of  com- 
pensation would  remove  the  incentive  of  per- 


IS2  APPLICATION  OF  VALUE  THEORY. 

sonal  gain.  This  incentive,  many  insist,  is  in- 
dispensable for  spurring  men  to  steady  and  effi- 
cient work,  indispensable  for  invention  and 
progress.  I  believe  it  was  Emerson  who  put  this 
in  a  -homely  phrase  by  saying  that  men  are  as 
lazy  as  they  dare  be.  It  were  idle  to  deny  the 
force  and  the  seriousness  of  this  objection,  and 
I  make  no  attempt  to  do  so.  I  recognize  its 
weight  and  shall  try  to  meet  it  as  fully  as  I  know 
how,  pointing  out,  in  the  first  place,  that  the  spur 
of  such  an  incentive,  though  softened,  is  not 
wholly  removed  in  the  contemplated  new  indus- 
trial order  of  things,  where  employment  is  to  be 
had  for  the  asking  and  compensation  equal  for 
work  of  standard  efficiency.  In  the  fact  that 
standard  efficiency  is  required  in  order  to  secure 
standard  compensation  there  may  be  incentive  to 
exertion  sufficient  for  all  practical  purposes;  and 
remember,  that  standard  efficiency  is  not  merely 
to  be  reached  by  the  young  worker,  but  it  is  to 
be  maintained,  as  described  in  chapter  III.  This, 
together  with  man's  natural  pride,  each  one  desir- 
ing to  stand  as  a  man  among  men,  entitled  to  the 
respect  of  his  fellows,  not  despised  as  a  shirk 
and  a  slacker,  the  more  so  when  all  are  conscious 
of  the  fact  that  the  shirking  of  one  immediately 
and  directly  puts  an  extra  burden  on  the  others; 
this,  I  think,  may  safely  be  relied  on  to  make 
practically  each  one  wish  to  do  his  full  duty,  and 
to  overcome  the  innate  tendency  to  indolence 
and  ease  of  which  we  all  have  a  share,  some  more, 
some  less. 

Moreover,   I  would  ask  these  objectors  and 
sticklers  for  the  incentive  of  personal  interest, 


SOME  OBJECTIONS  ANSWERED.  153 

how  effective  does  that  incentive  prove  today, 
under  the  present  economic  regime?  Are  there 
no  shirkers  and  deUnquents  today?  There  are 
indeed;  and  they  constitute  one  of  the  most  per- 
plexing problems  of  present  society.  Criminals, 
those  that  prefer  piracy  and  predation  to  honest 
toil;  also  the  demoralized;  the  discouraged  and 
discomfited  in  life's  struggle;  the  wrecks;  the 
down  and  outs;  these  constitute  a  large  class  in 
present  society  whom  this  highly  praised  incen- 
tive has  been  unable  to  save.  I  do  by  no  means 
claim  that  the  problem  presented  by  these  people 
would  be  automatically  solved  by  the  reconstitu- 
tion  of  society  along  the  proposed  lines;  or  that 
crime,  vice,  licentiousness,  and  indolence  would 
at  once  disappear.  But  I  do  firmly  believe  that 
the  difficulty  of  dealing  with  these  problems  would 
be  very  materially  reduced.  There  will  no  longer 
be  the  excuse  of  not  being  able  to  find  work, 
which  today  in  many  cases  is  but  a  welcome  pre- 
tense. The  stress  of  starvation  wages  would  no 
longer  excuse  slum  dwelling,  nor  excuse  denial  by 
parents  of  proper  schooling  to  children  and  the 
putting  of  them  into  factories  or  on  the  streets 
to  earn  a  few  dimes.  Whatever  disadvantage 
may  follow  from  reducing  this  incentive  to  exer- 
tion, the  advantage  of  the  new  economics  and 
the  new  social  order  based  upon  this  value  theory 
seems  to  me  so  great,  that  no  difficulty  of  detail 
ought  to  daunt  men  in  establishing  the  new  order. 
However,  as  previously  stated,  my  task  is  to  pre- 
sent this  value  theory,  and  particularly  to  sub- 
mit the  same  to  the  consideration  of  economists ; 
while  the  working  out  of  details  of  application 


154  APPLICATION  OF  VALUE  THEORY. 

had  better  be  left  to  those  who  come  later,  after 
the  value  theory  has  been  passed  upon,  and  has 
met  at  least  some  measure  of  acceptance. 

But  this  objection  of  loss  of  incentive  may  seem 
to  lie  in  a  particular  sense  against  the  equal  com- 
pensation idea.  It  may  be  claimed  that  if  all 
work  is  paid  alike  no  one  will  trouble  about  learn- 
ing a  trade  requiring  skill  and  training,  not  to 
speak  of  undertaking  the  tedious  and  wearisome 
task  of  preparing  for  a  profession,  when  no  re- 
ward of  higher  compensation  is  in  prospect.  This 
consideration  does  indeed  seem  weighty,  but 
it  will  on  closer  examination  be  found  much  less 
weighty  than  appears  at  first  thought.  It  has 
already  been  stated  that  part  of  the  professions 
may  find  fields  of  activity  outside  of  public  em- 
ployment, and  therefore  stand  outside  the  rating 
of  the  equal  compensation  scheme,  while  artists, 
writers,  philosophers,  and  preachers  stand  dis- 
tinctly outside  this  scheme.  Irrespective  of  this, 
it  is  well  known  that  individuals  who  strongly 
feel  called  to  write,  preach,  sing,  or  paint,  much 
prefer  to  follow  such  inclination,  regardless  of 
pecuniary  rewards  or  denials ;  and  it  is  not  to  be 
doubted  what  their  choice  of  occupation  would 
be,  though  the  money  reward  for  plying  their  art 
were  no  greater  than  for  ordinary  labor.  I  be- 
lieve it  was  Proudhon  w^ho  long  ago  said  some- 
thing to  this  effect  that  if  the  prima  donna  were 
given  the  choice  between  scrubbing  floors  or 
singing  at  the  same  compensation,  there  could 
be  no  doubt  that  she  would  choose  to  sing. 

This  reasoning  applies  to  all  such  professional 
work  as  would  come  under  the  equal  compensa- 


SOME  OBJECTIONS  ANSWERED.  155 

tion  scheme,  such  as  the  greater  part  of  teach- 
ing, industrial  art,  structural  and  mechanical  de- 
signing, accounting,  and  the  public  health  service 
of  medicine,  dentistry,  and  pharmacy.  And  the 
same  reasoning  applies  to  skilled  labor  as  against 
common  labor  occupations.  Most  boys  early  show 
a  liking  for  certain  kinds  of  activity,  and  by  far 
the  greater  number  delight  in  handling  tools. 
Some  want  to  be  sailors,  some  railroaders,  some 
incline  to  various  trades ;  want  to  be  smiths,  car- 
penters, masons;  while  others  naturally  take  to 
salesmanship  and  office  work.  And  still  others 
show  a  liking  for  plants  and  animals  and  will 
prefer  gardening  or  farming  as  an  occupation. 
Nearly  all  will  have  a  second  and  third  preference, 
and  if  they  cannot  be  given  their  first  choice 
will  take  second  or  third  choice  and  be  pleased 
at  that.  Also  let  it  be  remembered  that  ap- 
prenticeships will  be  of  short  duration;  with  the 
preliminary  advantage  of  vocational  school  train- 
ing, and  work  organized  in  the  interest  of  the 
community,  apprentices  will  be  properly  taught, 
not  left  to  pick  up  a  knowledge  of  their  craft  bit 
by  bit  as  opportunity  offers.  Therefore  two  years 
will  be  ample  time  to  give  any  young  person  of 
average  intelligence  a  sufficient  knowledge  of  a 
trade  to  pass  him  or  her  to  the  class  of  junior 
workers. 

With  such  facility  for  acquiring  a  trade  at 
comparatively  little  effort  and  self-denial,  the 
problem  will  not  be:  is  anyone  going  to  learn  a 
trade  and  become  a  skilled  mechanic,  but  rather, 
will  there  be  enough  left  who  do  not  learn  a  trade 
and  who  are  willing  to  remain  at  rough  common 


156  APPLICATION  OF  VALUE  THEORY. 

labor,  though  the  pay  be  the  same  for  both  kinds. 
The  insufficient  number  of  common  laborers, 
rather  than  their  excess,  may  present  a  difficulty, 
and  may  even  necessitate  paying  a  premium  for 
that  sort  of  labor  in  order  to  induce  a  sufficient 
number  to  engage  in  that  kind  of  work.  Men 
naturally  take  a  pride  in  being  able  to  perform 
the  more  difficult  kinds  of  work,  and  would  pre- 
fer the  finer  and  more  genteel  occupations,  even 
though  the  compensation  be  no  higher  than  for 
the  rougher,  coarser,  dirtier,  and  more  disagree- 
able work.  This  also  applies  to  the  professions 
and  semi-professions.  There  need  be  no  mis- 
giving, lest  there  should  not  be  a  sufficient  num- 
ber of  candidates  for  the  professional  and  semi- 
professional  work,  and  for  the  skilled  trades, 
under  a  regime  of  equal  compensation  in  these 
lines  and  for  common  labor. 

Next  in  order  of  importance  I  would  put  an 
objection  which  holds,  not  particularly  against 
the  equal  compensation  idea,  but  in  general 
against  nationalized  organization  and  control  of 
production  and  distribution.  Call  this  what  you 
please,  state  socialism,  collectivism,  or  merely  ex- 
tension of  government  function,  making  govern- 
ment employes  of  the  greater  number  of  indus- 
trial and  transport  workers.  As  has  been  pointed 
out  before,  state  socialism  is  not  necessarily  im- 
plied by  the  equal  compensation  idea;  yet  there 
is  a  close  kinship  between  the  two ;  and  as  stated 
on  a  previous  page,  I  consider  a  socialized  state 
unthinkable  without  equal  compensation  for  use- 
ful labor  of  standard  efficiency.  Without  that, 
socialism  is  a  travesty  and  a  mockery.     But  I 


SOME  OBJECTIONS  ANSWERED.  157 

may  just  as  well  now  face  this  objection  to  na- 
tional control  of  production  by  admitting  the 
force  of  the  objection  and  making  answer.  Let 
us  grant,  for  the  sake  of  argument,  that  collec- 
tive industry  would  necessitate  a  vast  number 
of  supervisors,  inspectors,  accountants,  auditors, 
stock-keepers,  time-keepers,  and  clerks;  all  of 
whom,  in  a  sense,  would  be  non-producers,  and 
their  pay  would  have  to  be  taken  out  of  the  wealth 
created  by  the  actual  producers.  Precisely  the 
same  overhead  expense  is  imposed  on  privately 
conducted  business  today,  with  some  addition.d 
items,  which  would  largely  be  eliminated  by  col- 
lectivism. As  such  there  is  the  purchasing  agent 
found  in  all  larger  establishments,  whose  function 
is  to  negotiate  or  dicker  for  favorable  prices  on 
raw  materials  and  subsidiary  supplies;  practi- 
cally all  advertising  expenses,  costly  illustrated 
catalogues,  traveling  salesmen,  and  the  major 
part  of  correspondence  and  mail  expense  would 
be  eliminated.  Raw  materials  would  all  have  a 
fixed  price,  and  would  be  drawn  from  the  nearest 
point  of  supply;  and  the  products  would  be  ship- 
ped to  the  nearest  market  of  consumption,  avoid- 
ing the  criss-cross  shipments  in  opposite  direc- 
tions of  like  goods  which  now  often  occur,  thus 
economizing  on  transportation. 

The  man  who  single-handed  conducts  a  peanut 
or  candy  stand,  a  cobbler  shop,  or  runs  a  dray 
or  an  omnibus,  such  a  man,  in  one  sense,  works 
under  ideal  conditions.  He  has  no  overhead  ex- 
pense ;  he  needs  no  foreman,  overseer  or  inspector 
to  see  that  the  work  is  done  promptly  and 
properly.      He    needs    neither    timekeeper    nor 


158  APPLICATION  OF  VALUE  THEORY. 

bookkeeper  or  cash  register  to  see  that  none  of 
his  cash  strays  into  wrong  pockets.  This,  as  I 
said,  in  one  sense  is  ideal.  But  such  extreme 
individuahsm  does  not  answer  the  requirement 
of  an  advanced  civiHzation.  Only  the  pettiest 
and  most  ineffective  work  can  be  done  in  such 
a  way.  The  work  and  business  of  civilized  lite 
and  its  large  undertakings  require  the  acting  to- 
gether of  numbers  of  men  in  united  and  properly 
organized  efforts.  One  smith  can  single-handed 
beat  out  a  horseshoe,  or  harnmer  out  nails,  though 
in  no  quantity  to  compare  with  the  forge  mill 
and  the  nail  machine.  Yet  he  could  do  it,  and 
it  has  been  done  in  the  past.  But  large  engine 
shafts,  or  other  forgings  weighing  tons,  it  is  ut- 
terly impossible  to  handle  in  a  one-man  smithy. 
This  requires  large  furnaces,  steam  hammers  and 
cranes,  and  the  united  efforts  of  a  number  of  men. 
And  here  comes  in  the  overhead  expense:  super- 
intendence, inspection,  designing,  accounting, 
time-peeking,  etc.  This  is  the  inevitable  accom- 
paniment of  every  great  enterprise  or  volumin- 
ous work,  whether  it  be  building,  manufacturing, 
transportation,  or  distribution.  This  overhead 
expense  attaches  to  all  such  work,  whether  it  be 
carried  on  collectively  or  privately.  It  is  even 
claimed  that  there  will  be  less  of  this  under  social- 
ized control  than  under  private;  which  may  be 
true,  since  the  necessity  thereof  will  decrease  in 
some  directions  while  increasing  in  other  direc- 
tions. It  is  not  of  record  that  the  administrative 
expenses  of  the  railroads  were  increased  when 
the  United  States  Government  took  control  of  the 
roads  in  1918.     But  Mr.  McAdoo  shortly  dis- 


SOME  OBJECTIONS  ANSWERED.  159 

pensed  with  the  services  of  a  great  many  attor- 
neys, and  also  with  those  of  freight  soHcitors;  re- 
duced the  advertising  expenses,  and  the  number 
of  city  ticket  offices. 

However  daunting  may  seem  the  immensity 
of  the  task  of  organizing  and  coordinating  prac- 
tically the  whole  production  and  distribution  for 
a  nation  of  a  hundred  million  people,  or  even  of 
the  several  states  separately,  the  task  will  have 
to  be  undertaken  some  day;  and  if  the  nations  in- 
volved in  the  present  war,  under  the  stress  of  that 
great  struggle,  found  it  necessary  to  assume  con- 
trol of  their  productive  and  distributive  business, 
as  a  means  of  self-preservation,  perhaps  they 
can  fully  as  well  find  it  both  possible  and  neces- 
sary to  do  so  as  a  means  of  self-preservation  in 
times  of  external  peace. 

It  may  be  proper  at  this  point  to  set  at  rest 
any  doubt  that  some  reader  might  have,  as  to 
the  ability  of  the  state  or  the  community  to  find 
employment  for  all  comers;  such  reader  basing 
his  doubt  upon  the  predicament  of  the  private 
employer  of  today,  who  can  give  out  no  work 
if  the  same  is  not  first  given  to  him,  and  who 
stands  utterly  helpless  in  times  of  panic  or  busi- 
ness stagnation.  Against  such  a  predicament 
the  state,  or  society,  is  immune  when  the  nation's 
labor  is  controlled  and  organized  for  production. 
Then  there  can  be  no  stagnation  of  that  sort,  and 
no  misery-breeding  unemployment;  not  as  long 
as  the  sun  shines,  the  rains  descend,  grass  grows, 
and  the  earth  yields  crops  and  other  material  re- 
sources. All  that  man  requires  in  life  may  be 
roughly  classed  under  six  heads:  food,  clothing. 


i6o  APPLICATION  OF  VALUE  THEORY. 

shelter,  transportation,  education,  and  recreation. 
The  last  two  are  not  strictly  economic  items. 
Civilized  man  may  be  expected  to  provide  for 
education  by  setting  aside  sufficient  means  to 
pay  the  expenses  thereof,  and  he  will  indulge 
joy-riding  and  recreation  as  he  finds  the  means, 
or  cut  out  these  things  as  the  means  thereof  fall 
short.  But  food,  clothing,  and  shelter,  which 
includes  transportation,  are  the  indispensables 
that  economics  is  primarily  concerned  with;  and 
considering  these  three  only,  for  the  sake  of  sim- 
plicity, we  can  emphatically  assert  that  these 
three  will  always  occasion  ample  employment  for 
all  comers ;  and  that  whenever  the  supply  of  these 
things  is  so  abundant  that  no  one  needs  be  hun- 
gry or  naked,  or  without  shelter,  then  by  that 
very  fact  the  misery  of  material  want  is  blotted 
out,  providing,  of  course,  that  these  things  are 
properly  distributed,  a  distribution  which  this 
new  era  economics  will  automatically  effect. 

The  whole  world  needs  food,  clothing,  and  shel- 
ter; well  then,  let  all  the  world  fall  to  and  pro- 
duce food,  clothing,  and  shelter ;  and  all  the  world 
will  have  these  things;  also,  all  the  world  will 
have  employment.  It  is  the  business  and  duty 
of  society,  through  its  executive  agents,  the 
various  branches  of  government,  to  organize  and 
control  the  work  of  producing  food,  clothing, 
and  shelter ;  to  fit  each  man  and  woman  for  some 
part  of  this  work;  and  to  assign  a  place  therein 
for  each  one  who  is  able  and  willing  to  work. 
No  individual,  no  "interests,"  and  no  "vested 
rights,"  can  any  longer  be  permitted  to  stand  as 
a  bar  between  man's  need  of  food,  clothing,  and 


SOME  OBJECTIONS  ANSWERED.  i6i 

shelter,  and  his  employment  at  producing  these 
things.  Should  these  things  become  too  abundant 
under  an  eight-hour  workday,  then  let  the  time 
be  reduced  so  as  to  provide  only  for  a  reasonable 
excess  over  the  annual  need,  that  any  unexpected 
shortage  due  to  unfavorable  seasons  or  partial 
crop  failure  may  be  met. 

The  world  has  for  centuries  been  able  to  divert 
great  numbers  of  men  to  other  pursuits,  educa- 
tional, and  for  recreation  or  amusement,  not  to 
speak  of  the  wastes  of  wars  and  armaments. 
And  the  world  does  so  divert  today,  and  will  in 
the  new  era  be  able  to  spare  from  the  work  of 
producing  food,  clothing,  and  shelter  vast  num- 
bers to  engage  in  educational  pursuits,  moral, 
scientific,  and  esthetic,  in  art  and  recreational 
work;  with  this  difference  however,  as  previous- 
ly mentioned,  that  anyone  engaged  in  such  lines 
of  work,  who  finds  that  he  has  missed  his  calling, 
will  not  be  doomed  to  starve  in  a  garret;  but 
will  always  find  an  open  door  at  the  public  em- 
ployment bureaus,  and  be  assigned  some  suitable 
work  at  which  to  earn  an  honest  and  decent  liv- 
ing. Since  such  people,  whatever  betide  them, 
will  still  need  food,  clothing,  and  shelter,  society 
cannot  deny  them  a  chance  in  some  way  to  help 
at  producing  food,  clothing,  and  shelter,  their 
very  need  of  these  things,  like  the  need  for  same 
of  all  other  people,  being  a  source  of  employment. 
There  is  no  room  for  doubt  that  the  socialized 
state  can  give  employment  to  all  comers,  till  the 
end  of  time. 


Chapter  X. 

New  Era  Society.    Further  Application  of 

Value  Theory. 

In  Part  II,  it  was  assumed  that  in  the  sane  and 
rational  society  of  the  future,  the  nation's  labor 
would  be  organized  for  effective  production,  not 
for  defensive  economic  warfare  as  in  the  present 
competitive  and  antagonistic  society,  where  each 
hand  aims  to  grasp  as  much  as  possible,  and 
where,  as  the  slang  expression  has  it,  the  devil 
takes  the  hindmost ;  that  is  to  say,  the  devil  takes 
him  who,  either  by  his  own  fault  or  the  fault  of 
others,  loses  out  in  the  game  of  grab. 

The  conscious  aim  and  avowed  purpose  of  new 
era  society  will  be  to  develop  useful  and  efficient 
workers  conjointly  with  good  citizens,  intelligent 
and  upright  men  and  women,  each  one  having 
opportunity  of  becoming  a  lady  or  gentleman  in 
the  truer  and  deeper  American  meaning  of  those 
words.  It  will  be  understood  that  in  order  to 
lay  claim  to  the  appellation  lady  or  gentleman, 
and  indeed  to  the  title  of  good  citizen,  he  or  she 
must  above  all  things  be  a  useful  member  of  so- 
ciety, a  worker  of  some  sort,  in  some  field  of  real 
usefulness;  no  parasite  can  in  anywise  claim 
good  citizenship.  The  educational  systems,  there- 
fore, will  be  constituted  to  serve  these  ends, 
moulding  the  rising  generations  to  usefulness  as 
workers,  as  well  as  to  good  citizenship.  The 
schools  will  be  coordinated  with,  and  be  con- 
tributory to,  the  nation's  organized  production, 

162 


FURTHER  APPLICATION  OF  THEORY.  163 

by  vocational,  manual,  and  technical  training 
according  to  required  needs.  This  coordination 
is  indeed  already  in  process  of  development,  as 
any  intelligent  observer  can  see.  The  national- 
ized factories  will  continue  the  educative  process 
of  the  schools  by  intimate  cooperation  with  these, 
and  by  some  sort  of  apprentice  system  which 
trains  the  young  worker  in  a  comparatively  short 
time.  The  school  training,  and  partly  the  train- 
ing in  apprenticeship,  will  be  at  the  expense  of 
society,  and  this  will  ofifset  claims  to  extra  com- 
pensation that  might  be  made  on  behalf  of  skilled 
workers  as  against  the  so-called  unskilled  worker. 
The  same  considerations  apply  to  professionals 
and  semi-professionals  in  the  public  service,  such 
as  doctors,  teachers,  draftsmen  and  designers, 
whose  education  and  training  will  be  acquired 
mostly  at  the  expense  of  society. 

It  was  suggested  in  chapter  III.  that  the  term 
of  apprenticeship  should  not  exceed  two  years, 
and  a  suitable  apprenticeship  wage  should  be 
paid,  with  increase  every  six  months;  then  the 
young  worker,  passing  through  his  junior  period, 
becomes  a  full  senior  or  journeyman  worker  with 
full  standard  pay,  his  work  having  reached  stand- 
ard efficiency.  As  explained,  this  labor  hour  of 
standard  efficiency  determines  the  value  and  the 
selling  price  of  the  various  products.  But  now 
it  will  happen  that  a  considerable  labor  product 
will  enter  the  exchange  market  which  is  in  part 
or  wholly  the  product  of  apprentices,  whose  labor 
is  not  of  standard  efficiency,  and  who  do  not  re- 
ceive standard  pay,  and  whose  efficiency  will  vary 
even  during  their  six  months  periods  of  fixed 


i64  NEW  ERA  SOCIETY. 

compensation.  And  in  consequence  of  this,  some 
of  these  products  may  pass  to  the  consumer 
above  cost  and  some  below  cost.  Now  this  fact 
may  be  seized  upon  by  some  stickler  to  condemn 
the  whole  theory  as  false  and  "unscientific,"  not 
realizing  that  in  doing  so  he  merely  shows  his 
own  ignorance  and  bigotry.  In  the  first  place, 
economics  is  not  an  exact  science,  like  mathe- 
matics and  physics,  where  matters  can  be  proved 
by  calculation,  or  demonstrated  by  laboratory  ex- 
periments. No  such  demonstrations  are  available 
to  economics ;  here  the  experiments  involve  states 
or  communities  and  may  require  decades  of  time. 
Most  of  its  conclusions  are  reasoned  out  from 
incomplete  data,  reasoned  to  seeming  self- 
evidency,  but  not  easily  susceptible  of  verifica- 
tion. Economics  is  called  a  science  by  courtesy, 
but  has  no  claim  to  exactness;  and  the  present 
writer  has  distinctly  stated  that  he  claims  for 
his  value  theory  no  mathematical  exactitude,  but 
thinks  it  the  nearest  approach  to  exact  industrial 
justice  that  human  thought  can  devise,  and  the 
best  means  of  securing  industrial  peace  and  gen- 
eral human  welfare.  Whatever  inequality  and 
injustice  remains  after  this  approach  has  been 
achieved,  must  be  accepted  on  the  principle  of 
bear  ye  one  another's  burden,  which,  as  pointed 
out  before,  is  also  quite  largely  required  under 
present  conditions. 

And  on  this  principle  of  bearing  one  another's 
burden,  the  seeming  failure  of  exact  adjustment 
of  rewards  in  the  case  of  apprentices,  and  in  the 
case  of  all  other  workers  as  well,  must  be  accepted 
as  part  of  the  imperfection  inhering  in  all  human 


FURTHER  APPLICATION  OF  THEORY.  165 

affairs.  Furthermore,  if  the  apprentice  at  first 
fails  to  render  a  full  equivalent  for  the  wages 
assigned  him,  let  us  consider  that  as  part  of  the 
expense  society  assumes  to  educate  him;  and  if 
later  the  value  of  his  output  exceeds  his  wage, 
let  that  help  to  even  out  matters  between  him  and 
society.  Fixing  a  sale  price  for  the  products  of 
apprentice  labor  may  either  be  left  to  the  arbi- 
trary decision  of  competent  judges,  or  be  ascer- 
tained by  having  similar  things  produced  by 
standard  labor  to  determine  their  value  and  price. 
Considering  that  the  period  of  apprenticeship  will 
be  short,  while  the  average  duration  of  a  healthy 
person's  active  life  as  a  full  grade  worker  is 
thirty-five  or  forty  years,  this  matter  of  ap- 
prentice compensation  is  after  all  not  of  any 
great  importance. 

As  a  mode  of  providing  the  necessary  revenue 
for  defraying,  in  the  main,  the  expenses  of  ad- 
ministration, education,  public  health  and  safety, 
hospitals,  asylums,  pensions,  etc.,  I  have  sug- 
gested including  in  the  selling  price  of  every 
article  produced  in  the  national  factories  a  cer- 
tain per  cent,  above  the  actual  cost  of  production. 
This  constitutes  a  form  of  taxation  which  would 
largely  take  the  place  of  property  taxation, 
where  there  will  be  little  or  no  privately  owned 
productive  property  to  tax ;  and  this  would  reach 
every  member  of  the  community  in  his  character 
as  a  consumer.  It  will  be  necessary  though 
to  supplement  this  scheme  of  taxation  by  addi- 
tional forms,  designed  to  reach  such  production 
or  business  as  may  still  be  carried  on  outside  the 
nationalized  industries,  so  as  not  to  give  to  pri- 


i66  NEW  ERA  SOCIETY. 

vate  work  an  unfair  advantage  over  the  national- 
ized, through  evasion  of  taxation.  I  believe  it 
will  be  both  necessary  and  expedient  to  leave  a 
considerable  field  open  for  private  activity,  for 
work  outside  the  nationalized  industry  and  busi- 
ness; especially  so  during  the  transition  period. 
For  there  will  probably  be  a  great  number  of 
natural  malcontents  who  could  not  rest  satisfied 
unless  they  had  a  chance  to  paddle  their  own 
canoe,  or  at  least  to  have  a  try  thereat.  It  may 
therefore  be  expedient,  and  indeed  necessary,  to 
provide  a  vent  of  escape  for  the  spirit  of  discon- 
tent and  fault-finding  of  people  for  whom  it  is 
difficult  to  submit  to  the  strict  discipline,  prompt 
hours,  regulation  and  supervision,  which  will  be 
found  inseparable  from  socialized  production. 
Let  such  people  open  a  cobblershop,  a  news  or 
candy  stand,  barbershop,  run  a  dray  or  wayside 
store;  subject  of  course  to  all  restrictions  of  sani- 
tation and  child  protection  rules,  as  well  as  to 
such  detail  of  taxation  as  may  be  deemed  neces- 
sary to  prevent  a  number  of  men  from  combining 
in  private  enterprises  with  an  unfair  advantage 
over  fully  taxed  public  enterprises.  Incidentally, 
such  private  enterprises  may  serve  the  useful 
purpose  of  setting  a  pace  or  mark  of  efficiency, 
below  which  socialized  industry  must  not  fall. 
Various  license  and  administration  fees,  fines, 
and  perhaps  a  poll  tax,  dog  tax,  and  other  luxury 
taxes  may  be  continued  to  supplement  the  main 
source  of  revenue.  And  I  am  convinced  that 
import  duties  will  be  continued.  Every  country 
will  have  to  guard  against  being  made  the  dump- 
ing  ground    of   products    produced   by    foreign 


FURTHER  APPLICATION  OF  THEORY.  167 

underpaid  labor.  The  universal  policy  of  all 
leading  nations  will  be  to  make  their  own  country 
as  near  as  possible  industrially  independent,  pro- 
duce at  home  all  that  they  possibly  can,  and  im- 
port only  what  necessity  compels,  and  thus 
provide  in  the  largest  possible  measure  employ- 
ment for  their  own  people.  It  will  be  the 
conscious  aim  to  reduce  imports  and  exports  to  a 
minimum,  the  reverse  of  the  present  maddening 
frenzy  for  foreign  trade. 

Closely  connected  with  this  matter  of  raising 
revenue  to  pay  the  salaries  and  other  expenses 
of  various  administration  activities  and  of  so- 
called  unproductive,  or  indirectly  productive 
work,  is  the  question  of  replacing  old  and  worn- 
out  machinery  of  production  and  transportation, 
and  the  necessary  current  stock  of  raw  materials 
and  partly  finished  commodities;  or,  in  the  lan- 
guage of  economists,  the  replacing  of  consumed 
capital,  and  providing  additional  capital  as  the 
need  for  the  same  arises.  I  have  hinted  that  such 
capital  could  be  accumulated  by  making  the  per- 
centage of  cost  added  to  the  selling  price  of  manu- 
factured goods  sufficient  to  provide  for  this  item 
also  along  with  the  administration  expenses  re- 
ferred to  above.  In  this  way  every  individual  will 
then  pay  a  slight  excess  on  any  article  he  buys, 
and  thus  "abstain,"  "save,"  and  "create"  tiny 
droplike  amounts  of  capital,  which  by  their  great 
number  will  make  up  the  mighty  volume  needed 
in  the  nation's  work.  And  in  this  manner  every 
member  of  society  becomes  a  contributor  to  the 
national  capital,  a  fellow  capitalist  with  all  other 
members  of  the  community.     Capital,  according 


i68  NEW  ERA  SOCIETY. 

to  accepted  economists,  is  wealth  withheld  from 
immediate  consumption  and  used  for  productive 
purposes,  hence  is  said  to  be  the  result  of 
abstinence  or  saving.  I  find  no  fault  with  this 
definition,  and  I  accept  it  as  holding  true  what- 
ever the  form  of  social  organization  may  be,  in- 
dividualistic or  socialistic.  In  a  socialistic  state 
abstention  will  be  as  necessary  in  order  to  provide 
machinery  of  production  and  transportation  as 
under  any  other  form  of  society.  A  certain 
amount  of  labor  must  be  set  aside  and  devoted 
to  producing  this  machinery,  this  "capital,"  which 
cannot  be  eaten  as  food  or  worn  as  clothes. 
That  means  abstention,  that  is  saving,  and  that 
will  have  to  be  practiced  in  any  kind  of  civilized 
society. 

Some  writers  have  thoughtlessly  asserted  that 
capital  does  not  result  from  abstention,  because, 
as  they  claim,  the  abstainer  as  a  rule  is  not  in 
possession  of  the  capital.  That  claim  may  be 
true,  or  largely  true,  but  it  is  not  in  point,  for  it 
does  not  alter  the  fact  that  somebody  must  ab- 
stain in  order  that  products  may  accumulate, 
no  matter  in  whose  hands  the  accumulation  may 
finally  lodge.  If  the  possessing  capitalist  under 
the  present  regime  does  not  really  practice  self- 
denial,  does  not  himself  abstain,  yet  it  may  be  he 
who  compels  others  to  abstain  and  thus  brings 
about  the  accumulation  of  capital.  And  per- 
haps this  prodigally  inclined  humanity  would 
not  have  abstained  otherwise  than  under  such 
compulsion.  If  this  is  true,  then  the  private  capi- 
talist has  in  this  wise  fulfilled  a  certain  sociolog- 
ical  and   necessary   function,   the  necessity   for 


FURTHER  APPLICATION  OF  THEORY.  169 

which  will  vanish  when  collective  abstention  and 
saving  in  a  socialized  state,  as  indicated  above, 
takes  the  place  of  the  private  saving  and  absten- 
tion which  is  necessary  today.  Possibly  even 
then  some  scope  may  still  be  left  for  private  sav- 
ing and  private  capital,  especially  in  the  transi- 
tion period. 

The  application  of  this  theory  of  value  and  the 
equal  compensation  scheme  to  industrial  work 
and  to  the  great  transportation  enterprises, 
seems  to  the  author  a  comparatively  simple  mat- 
ter, as  also  does  the  taxation  scheme  here  out- 
lined to  replace  the  property  tax  of  the  present. 
But  the  application  of  both  the  value  theory  and 
its  price  determining  function,  as  well  as  the  indi- 
cated taxing  scheme,  to  agriculture  and  agricul- 
tural products,  presents  peculiar  problems  of  far 
greater  difficulty;  because  of  the  much  greater 
diffusion  of  private  ownership,  and  the  conse- 
quent unshakeable  and  unquestioning  belief  in 
the  correctness,  justness,  and  inviolability  of  pri- 
vate ownership  and  individual  control  of  the  soil 
and  its  products.  Only  where  farmland  is  con- 
centrated in  large  estates,  owned  by  a  numerically 
small  class,  while  the  tilling  is  done  by  tenant 
farmers  and  landless  laborers,  is  there  any  likeli- 
hood that  the  socializing  or  nationalizing  of  agri- 
cultural land  will  ever  be  an  accomplished  fact. 
But  not  so  where  the  land  is  held  in  small  j)arcels 
by  a  largfe  class  of  individual  owners,  whose  num- 
ber runs  into  millions.  The  Russian  peasant  was 
quite  ready  to  dispossess  the  big  landowners  dur- 
ing the  Bolshewick  regime,  but  it  is  not  of  record 
that  they  meant  to  socialize  or  nationalize  the 


170  NEW  ERA  SOCIETY. 

land;  each  was  eager  to  make  a  parcel  his  own 
private  possession,  and  the  large  landowners, 
being  comparatively  few  in  number,  were  power- 
less to  resist  the  swarming  peasants.  But  no 
Bolshewick  decree  would  be  able  to  terminate  the 
private  possession  of  a  land-owning  peasantry  if 
the  same  outnumbered  the  Bolshewick  army  three 
to  one.  In  what  manner  agricultural  land  is  to 
be  nationalized,  if  ever,  in  countries  like  France 
and  the  United  States,  with  their  great  number 
of  small  land-owning  farmers,  and  each  one  a 
voter,  I  have  no  idea,  unless  it  be  by  a  gradual  pro- 
cess of  voluntary  association  and  combining,  per- 
haps within  counties  or  townships.  Or  if  perhaps 
a  rapid  process  of  concentration  of  land  property 
and  elimination  of  small  owners  under  the  com- 
petitive stress  of  the  present  regime  should  take 
place,  and  produce  a  small  number  of  large 
owners,  and  a  large  number  of  tenant  farmers 
and  hired  farm  laborers.  Such  a  condition  might 
eventually  lead  to  expropriation  and  perhaps  to 
nationalization  of  the  soil.  But  such  a  devolution 
is  hardly  to  be  expected,  and  would  be  most  de- 
plorable. 

Many  of  the  ancient  nations  were  city  repub- 
lics, or  city  states,  and  these  dominated  and 
controlled  the  land  and  had  the  same  tilled,  mostly 
by  slaves.  In  the  Middle  Ages  the  land  was  like- 
wise tilled  by  serfs,  possessing  neither  the  land 
nor  enjoyinp"  any  political  rights.  But  in  modern 
times  the  tiller  of  the  soil  has  in  all  advanced 
countries  become  the  most  important  and  power- 
ful economic  and  political  factor.  It  is  he  to 
whom  all  others  must  look  for  sustenance,  and 


FURTHER  APPLICATION  OF  THEORY.  171 

he  cannot  be  dealt  with  by  force,  but  only  by 
bargaining.  And  while  he  may  not,  and  in  fact 
does  not,  in  advanced  countries  outnumber  the 
other  elements  of  population,  yet  he  will  always 
be  numerous  enough  to  command  respect;  and 
he  holds  the  whiphand  over  the  rest,  because  it 
is  he  who  holds  the  bread  basket  of  the  race. 
If  out  of  this  situation  there  should  in  course 
of  time  be  engendered  a  serious  antagonism 
between  city  and  country,  that  were  a  most 
lamentable  result;  and  it  is  my  hope  that  this 
gospel  of  equal  compensation  for  all  kinds  of 
useful  labor,  including  the  farmer's  labor,  will 
head  off  such  a  calamity. 

However,  as  admitted  above,  the  application 
of  these  principles  to  farm  products  and  to  farm 
labor  presents  special  difficulties,  the  more  so  as 
there  will  be  little  or  no  sentiment  in  favor  of 
nationalizing  the  land,  and  thus  cause  it  and  the 
labor  of  tilling  the  soil  and  marketing  the  crops 
to  be  publicly  organized  and  controlled.  The  de- 
mand for  nationalizing  the  land  comes  from  city 
people,  from  radical  labor  and  reform  organiza- 
tions, not  from  farmers  or  farm  land  owners.  I 
doubt  very  much  that  the  mere  mental  realization 
that  this  earth  and  the  life-sustaining  soil  is  the 
common  inheritance  of  the  race,  that  theoretically 
no  individual  man  can  of  right  claim  to  own  the 
earth  or  a  part  thereof,  will  ever  create  a  senti- 
ment in  the  minds  of  the  present  holders,  strong 
enough  to  induce  them  to  relinquish  their  private 
ownership  and  voluntarily  yield  possession  of 
their  lands  for  the  purpose  of  nationalizing  the 
same.   It  is  possible  that  cities  in  their  corporate 


172  NEW  ERA  SOCIETY. 

capacity  may  acquire  large  tracts  of  farm  land, 
and  there  inaugurate  systematically  organized 
farming  operations,  under  the  same  work  and 
wage  conditions  that  obtain  in  factories,  and 
thereby  establish  rates  of  compensation  for  farm 
work,  as  well  as  cost  and  price  of  products  in 
accordance  with  this  value  theory.  And  this,  if 
successful,  would  set  a  pace  and  a  pattern  for 
individual  and  private  farmers  to  follow,  both 
in  pay  for  help  and  in  price  for  products. 

Another  special  difficulty  in  connection  with 
agricultural  operations,  which  will  have  to  be 
met,  is  the  variableness  in  crop  yield  according 
to  favorable  or  unfavorable  years  or  even  sea- 
sons; to  weather  conditions,  sometimes  affecting 
comparatively  limited  areas.  Also  the  unexpected 
appearance  of  insect  pests,  or  plant  and  animal 
diseases  tend  to  complicate  the  problem,  since 
these  vicissitudes  may  affect  certain  areas  and 
not  affect  others  in  the  same  jurisdiction  or  ad- 
ministrative zone.  This  would  present  a  prob- 
lem of  averaging  the  labor  hour  output  and  the 
price  to  the  final  consumer,  which  ought  to  be 
uniform  over  a  reasonably  large  territory,  and 
preferably  so,  over  an  entire  province  or  state. 
It  would  also  be  necessary  to  continue  the  realty 
tax  on  privately  cultivated  land,  to  offset  the  pro- 
duction tax  on  publicly  cultivated  land  or  its 
products. 

But  all  this  is  minor  detail,  and  I  remind  the 
reader  once  more  that  my  task  is  to  present  a 
value  theory,  not  a  fully  detailed  scheme  of  re- 
constituted society.  I  am  presenting  a  theory  of 
value,  and  I  especially  present  this  theory  to  the 


FURTHER  APPLICATION  OF  THEORY.  i73 

consideration  and  examination  of  economists, 
and  to  people  who  previously  have  given  some 
thought  and  study  to  economics.  Let  such  peo- 
ple pass  judgment  on  this  theory  of  value,  and,  if 
they  should  find  it  true,  then  perhaps  someone 
will  build  upon  that  theory  a  complete  system  of 
economics,  and  others  may  perhaps  essay  to  solve 
the  implied  difficulties,  some  of  which  I  thought 
it  advisable  to  mention  as  the  chief  ones,  and  for 
these  I  suggested  tentative  solutions. 

While  it  is  for  economists  to  judge  this  value 
theory,  it  is  for  men  in  general  to  show  whether 
they  are  ready  to  accord  equal  value  to  all  kinds 
of  useful  work  of  standard  efficiency,  and,  of 
course,  equal  compensation  for  the  same.  This 
to  my  thinking  is  the  only  way  to  end  the  ex- 
ploitation of  man  by  man ;  of  establishing  social 
justice  and  industrial  peace;  of  abolishing  pov- 
erty and  slums ;  of  ending  uncertainty  of  employ- 
ment and  periodical  stagnation  of  work,  with  its 
idleness  and  distress;  of  removing  from  the 
minds  of  men  the  fear  that  some  day  poverty 
and  want  may  overtake  them,  a  fear  that  causes 
them  greedily  to  grasp  for  all  they  can  reach, 
to  accumulate  and  to  hoard  as  a  protection  aginst 
such  a  contingency. 

Men  and  brothers,  are  you  ready  for  these 
things;  are  you  capable  of  that  high  rectitude 
of  spirit  which  refuses  to  over-reach  and  take 
advantage  of  another;  which  claims  for  itself 
no  more  than  it  is  willing  to  grant  to  others; 
which  is  ready  to  pay  with  an  hour's  labor  of  its 
own  for  every  hour's  service  rendered  by  another, 
or  for  every  hour's  labor  product  of  another? 


174  NEW  ERA  SOCIETY. 

Or  can  you  not  rise  to  that  measure  of  noble 
clear-seeing  unselfishness?  Do  you  insist  that 
the  "maddened  crowd's  ignoble  strife"  shall  go 
on,  "the  good  old  way,  the  simple  plan,  that  he 
shall  take  who  has  the  power,  and  he  shall  keep 
who  can";  that  every  man's  hand  shall  still  be 
raised  against  his  fellow;  that  no  one  shall  ask 
himself  to  how  much  or  to  how  little  am  I  entitled, 
but  each  shall  aim  for  all  he  can  grab  and  grasp 
of  the  nation's  annual  product;  that  graft  and 
exploitation  shall  continue;  that  the  severest, 
hardest,  and  most  necessary  labor  shall  continue 
to  receive  the  meanest  pay,  and  he  who  performs 
it  be  rewarded  with  contempt,  while  those  per- 
forming lighter  work  are  better  rewarded,  and 
some,  whose  work  is  of  mere  make-believe  value, 
may  be  highly  rewarded  and  greatly  honored, 
because  of  the  world's  ridiculous  and  false  value 
estimates?  Do  you  want  all  this  to  continue: 
the  strikes,  lockouts,  unemployment,  the  turmoil, 
and  blind  grasping,  with  its  periodically  inevitable 
culmination  in  war  between  nations?  Men  and 
brothers,  the  choice  rests  with  you. 

I  am  presenting  a  value  theory  which  is  to 
cure  the  evils  and  effect  the  good  things  here 
enumerated.  But  this  does  not  imply  a  sudden 
upheaval,  and  a  violent  overturning  of  the  present 
social  structure.  It  does  not  imply  the  imme- 
diate nationalization  of  the  country's  natural  re- 
sources, and  of  the  machinery  of  production  and 
distribution.  This  theorv  is  applicable  to  present- 
day  society,  as  well  as  to  a  socialized  state  and  to 
a  transition  stage  of  gradual  transformation  from 
an   individualistic   society  to   a   fully   socialized 


FURTHER  APPLICATION  OF  THEORY.  175 

State;  while  for  the  latter  it  is  an  indispensable 
feature.  Applicable  alike  under  privately  owned 
land  and  capital  and  under  publicly  controlled 
land  and  capital,  it  is  the  very  thing  to  promote 
a  gradual  and  peaceful  transition. 

Still  another  question  may  puzzle  some  read- 
er, and  he  may  want  to  know  how  this  value 
theory  explains  the  value  of  a  patent  right,  or 
the  great  value  of  corner  lots  on  the  principal 
streets  of  large  cities.  Well,  these  values  are 
not  explained  or  accounted  for  by  this  theory. 
These  "values"  are  not  labor  products,  and  do 
not  properly  belong  in  the  realm  of  economics, 
as  explained  in  Part  II,  where  this  matter  has 
been  touched  upon,  and  in  the  summary  of  the 
value  theory.  In  so  far  as  we  conventionally  call 
them  values,  and  by  the  custom  of  centuries  think 
of  them  as  such,  these  "values"  are  created  by 
legislative  enactment,  but  not  produced  by  labor. 
A  patent  right  is  a  privilege  of  monopoly  granted 
by  legislative  authority  to  inventors,  giving  them 
the  exclusive  right  for  a  term  of  years  to  make 
and  sell  the  invented  article.  This  is  as  much 
a  grant  in  reward  for  presumed  or  performed 
services  rendered,  as  is  the  grant  of  a  pension. 
The  legislative  wisdom  of  the  founders  of  this 
government  so  provided  in  the  constitution  of  the 
United  States,  and  such  appears  to  be  the  prac- 
tice in  all  advanced  countries;  and  it  was  no 
doubt  at  the  time  an  eminently  proper  provision, 
and  the  same  will  probably  be  continued,  in  some 
form,  in  socialized  society. 

As  for  the  great  "value"  of  buildinsr  sites  in 
high  grade  business  or  residence  districts,  that 


176  NEW  ERA  SOCIETY. 

also  is  a  matter  which  does  not  come  within  the 
province  of  new  era  economics.  And  the  new 
value  theory  is  not  called  upon  to  explain  or  to 
justify  the  same,  any  more  than  the  economics 
of  Adam  Smith  and  J.  S.  Mill  were  called  upon  to 
explain  and  justify  the  value  of  slaves  to  the 
slaveholders,  although  £hattel  slavery  actually 
existed  at  the  time  these  men  wrote  their  books 
on  political  economy.  Human  slavery  is  usurpa- 
tion and  robbery  by  force  or  fraud  of  one  man's 
freedom  and  personal  service  by  another,  for  the 
benefit  and  advantage  of  this  other;  and  private 
property  in  land  is  by  many  writers  similarly 
characterized  as  based  on  force  and  fraud,  on 
the  disinheritance  and  despoliation  of  some  men 
by  other  men.  My  theory  is  not  concerned  with 
"value"  founded  on  any  such  basis.  There  is  an 
extensive  literature  on  this  question,  and  a  school 
of  writers  on  sociology  and  economics  who  hold 
the  above  view  and  who  deal  with  the  unearned 
increment  of  land  values.  Of  these  Henry 
George  and  the  Single  Taxers  are  examples. 

Even  such  a  conservative  economist  as  J.  S. 
Mill  makes  statements  like  these:  "Enough  is 
known  of  rude  ages  to  show  that  tribunals  were 
established  to  repress  violence  and  terminate 
quarrels,  not  to  define  rights ;  and  they  gave  legal 
effect  to  first  occupancy,  treating  as  an  aggressor 
him  who  tried  by  violence  to  turn  another  out 
of  possession.  Let  us  suppose  an  initial  com- 
munity, unhampered  by  previous  arrangements, 
occupying  for  the  first  time  an  uninhabited  coun- 
try. If  private  property  (in  land)  were  adopted 
we  presume  that  it  would  be  accompanied  by 


FURTHER  APPLICATION  OF  THEORY.  177 

none  of  the  inequalities  which  obstruct  the  bene- 
ficial operation  of  the  principle  of  private  prop- 
erty in  old  society."   (Book  II,  chapter  I,  p.  259. J 

'The  'sacredness'  of  property  does  not  un- 
qualifiedly apply  to  landed  property.  No  man 
made  the  land.  Its  appropriation  is  wholly  a 
question  of  general  expediency.  When  private 
property  in  land  is  not  expedient,  it  is  unjust.  To 
be  allowed  the  exclusive  right  over  a  portion  of 
the  common  inheritance  of  mankind,  while  there 
are  others  who  have  no  portion,  is  a  privilege. 
In  the  very  nature  of  the  case,  whoever  owns 
land  keeps  others  out  of  the  enjoyment  of  it." 
(Book  II,  chapter  II,  pp.  295  and  297.) 

I  accept  the  above  as  sane  and  sensible  views; 
and  so  I  hold  private  property  in  land  to  be  a 
privilege,  granted  and  upheld  by  legislative  en- 
actment upon  the  presumption  that  such  private 
property  is  expedient,  and  in  the  totality  of  its 
effect  is  to  the  best  interest  of  the  race,  as  insur- 
ing a  more  efficient  cultivation  of  the  soil,  better 
crop  yields,  and  a  fuller  subsistence  for  the  na- 
tion than  otherwise  would  be  had.  Therein  lies 
the  expediency;  but  if  it  should  fail  in  this,  or 
if  the  attendant  evils  connected  with  private  prop- 
erty in  land  are  found  to  outweigh  the  advantages, 
then  expediency  demands  a  change,  a  restriction, 
or  perhaps  even  the  abolition  of  private  property 
in  land.  However,  as  stated  repeatedly,  I  have 
no  intention  to  discuss  the  question  of  private 
ownership  of  land;  I  am  advocating  a  value 
theory  which  is  not  dependent  on  the  abolition 
of  private  ownership  of  land  and  capital,  but 
which  presents  its  own  claims  to  a  hearing,  to 


178  NEW  ERA  SOCIETY. 

consideration  and  acceptance  in  present  as  well 
as  in  future  human  society.  t<? 

I  have  so  far  omitted  any  reference  ei-  Karl 
Marx  and  his  economics,  and  I  have  felt  tempted 
to  omit  any  such  reference  altogether.  But  since 
I  expect  this  book  to  be  read  and  discussed  by 
many  Socialists,  some  of  these  might  ask :  Where 
does  the  Marxian  economics  come  in;  has  this 
writer  never  heard  of  Karl  Marx? 

To  such  I  make  answer  that  I  have  read 
Marx's  work,  Capital,  and  various  interpreta- 
tions of  Marxian  economics  by  secondary 
writers;  but  I  have  not  been  able  to  escape  the 
conclusion  that  whatever  credit  may  be  due 
Marx,  and  whatever  else  he  otherwise  may  have 
accomplished  in  the  interest  of  human  progress, 
he  certainly  has  not  given  us  a  theory  of  value 
that  is  rational  and  consistent  with  facts.  Marx 
starts  with  the  assumption  that  all  commodities 
exchange  in  the  everyday  market  at  their  true 
values;  while  I  start  from  the  exact  opposite, 
that  the  world's  value  estimates  of  both  the  com- 
modities and  the  labor  that  produces  them  are 
false  and  cruelly  unjust,  and  that  this  constitutes 
a  fundamental  cause  of  all  economic  evils.  If  it 
were  true  that  commodities  exchange  at  their 
just  values,  then  economic  reformers  would  be 
without  a  cause,  for  there  would  be  nothing  eco- 
nomic to  reform,  and  we  could  sit  down,  fold  our 
hands,  and  say:  God  is  in  his  heaven,  all  is 
well  with  the  world. 

But  I  do  not  propose  here  to  open  any  con- 
troversy, or  any  discussion  of  Marxian  econom- 
ics, or  of  his  dissertation  on  value.    Let  them  die 


FURTHER  APPLICATION  OF  THEORY.  179 

a  natural  death  as  things  obsolete  and  no  longer 
up  to  date.  I  ask  every  reader  to  judge  this  book 
on  its  own  merits  or  demerits,  without  reference 
to  Adam  Smith,  Mill,  or  Marx,  or  any  other 
writer. 

Socialists  have  for  half  a  century  emphasized 
a  demand  in  their  platform  that  labor  shall  re- 
ceive in  compensation  the  full  and  true  value  of 
its  toil.  But  no  one  has  explained  what  that  full 
and  true  value  is,  or  how  it  may  be  ascertained. 
It  has  tacitly  been  assumed  that  the  selling  price 
to  the  consumer  constitutes  the  true  value  of  a 
product.  But  I  have  shown  in  this  book  that 
such  a  view  indicates  absolute  ignorance  of  the 
true  nature  of  value;  it  is  the  unreasoned  no- 
tion of  the  man  in  the  street.  This  is  generally 
admitted  by  economists,  some  of  whom  openly 
confess  that  the  question  of  value  is  as  yet  an 
unsolved  problem  in  economics. 

Now  good  friends  in  the  Socialist  camp,  the 
true  value  of  an  hour's  or  a  day's  labor  is  its 
product,  and  when  exchange  of  products  is  neces- 
sary, which  is  nearly  always  the  case,  then  the 
value  of  one  hour's  labor  or  product  equals  the 
value  of  one  hour's  labor  or  product  in  some 
other  line  of  work,  the  labor  in  all  cases  being 
of  standard  efficiency,  as  minutely  explained  in 
part  II.  of  this  book.  This,  and  this  only,  can 
give  sense  and  meaning  to  your  demand  that 
labor  be  paid  the  full  value  of  its  toil. 

Socialists  have  been  too  much  in  the  habit  of 
preaching  class  hatred  and  indulging  in  denuncia- 
tions of  individuals  and  of  certain  classes,  espe- 
cially the  capitalist  or  employing  class,  holding 


i8o  NEW  ERA  SOCIETY. 

these  individuals  and  classes  responsible  for  all 
societary  evils.  These  evils  are  rather  the  marks 
of  an  unfinished  process  of  societary  evolution, 
for  which  no  individual  or  class  of  men  can  in 
justice  and  in  reason  be  held  responsible.  It  is 
time  to  discard  such  thoughts,  and  take  a  more 
comprehensive  view  of  humanity's  common  strug- 
gle of  evolving  to  a  higher  and  better  civilization , 
the  effort,  in  Tennyson's  words,  to 

Move  upward,  working  out  the  beast, 
And  let  the  ape  and  tiger  die. 
It  is  time  to  realize  that  this  ape  and  tiger  in  the 
human  breast  is  not  confined  to  a  certain  class  of 
men,  employers,  capitalists,  and  landlords,  but 
finds  a  lair  in  all  breasts;  and  that  it  is  the  busi- 
ness of  all  men,  first  and  foremost,  to  let  die  this 
ape  and  tiger  in  their  own  breast. 

Finally  I  will  answer  a  question  that  has  been 
put  to  me  occasionally,  and  that  may  occur  to 
many  a  reader ;  namely :  How  is  this  equal  com- 
pensation to  be  established  in  actual  practice,  who 
is  to  establish  it,  how  is  it  to  be  brought  about? 

This  question  might  be  answered  by  saying  that 
equal  compensation  will  establish  itself  in  course 
of  societary  evolution  without  requiring  con- 
scious and  specific  efforts  to  that  end.  And 
while  such  an  answer  perhaps  would  be  the  most 
correct  and  the  most  comprehensive  that  could 
be  given,  yet  it  is  expressed  in  such  general  terms, 
and  is  so  indefinite,  that  in  most  ears  it  would 
sound  like  an  evasion  rather  than  an  answer.  I 
will  therefore  answer  more  satisfactorily  by 
specifying  various  ways  in  which  the  adoption, 
or  at  least  approximation  toward  equal  compen- 


FURTHER  APPLICATION  OF  THEORY.  i8i 

sation,  can  be,  may  be,  and  probably  will  be  pro- 
moted. 

The  first  steps  leading  to  such  a  consumma- 
tion are  to  create  a  moral  sentiment  in  its  favor, 
by  proclaiming  and  preaching  this  gospel  of 
brotherliness ;  proclaiming  it  as  something  de- 
manded by  an  enlightened  moral  sense  and  judg- 
ment, as  something  demanded  by  an  awakened 
social  conscience.  This  book  may  possibly  be  the 
initial  note,  the  beginning  of  such  a  call;  and  it 
will  probably  be  followed  by  others,  written  by 
other  men,  variously  intoned,  but  in  the  main 
sounding  as  a  keynote  equality  of  compensation 
for  equal  work;  this  meaning  work  of  standard 
efficiency,  no  matter  what  the  line  of  useful  work 
may  be.  Quite  a  number  of  men  will  probably 
come  forward  proclaiming  this  as  the  only  real 
equality  of  rights  and  of  opportunity,  the  only 
genuine  democracy,  co-heirship,  and  brother- 
hood of  men.  For  I  am  surely  not  the  only  one 
who  holds  such  views;  in  fact  I  know  there  are 
others  who  think  along  similar  lines;  and  some 
of  these  have  perhaps  already  given  expression 
to  their  thoughts. 

Next  I  expect  every  Christian  pulpit  to  take  up 
this  glad  tidings  for  the  common  man,  this  eco- 
nomic interpretation  of  the  Nazarene's  gospel 
of  brotherhood  and  good  will  among  men;  this 
economic  gospel  that  is  to  put  men  "at  one"  with 
each  other,  that  is  to  lift  up  the  weak  and  help 
them  to  their  feet,  instead  of  trampling  them  in 
the  dust;  that  calls  on  each  one  to  labor  accord- 
ing to  his  gifts,  without  insisting  on  preference 
or  demanding  the  chief  seats  at  life's  banquet 


i82  NEW  ERA  SOCIETY. 

table.  It  seems  to  me  that  every  truly  Christian 
pulpit  would  feel  impelled  to  preach  this  economic 
millenium. 

Also  it  is  to  be  hoped  that  the  teachers  of  eco- 
nomics, if  they  feel  that  here  is  offered  a  rational 
and  consistent  theory  of  value  which  will  elimi- 
nate much  controversy  from  their  science,  that 
these  then  will  endorse  this  value  theory,  and  by 
such  endorsement  add  the  weight  of  their  opin- 
ion to  the  sentiment  for  equal  compensation. 

Then  all  up  to  date  reform  and  labor  organi- 
zations, it  appears  to  me,  will  necessarily  have 
to  subscribe  to  this  doctrine,  and  raise  their  voices 
in  favor  of  the  equal  compensation  idea.  A  re- 
fusal to  do  so  would  constitute  moral  suicide  on 
the  part  of  such  organizations,  as  indicating  a 
failure  to  align  themselves  with  the  world's  evi- 
dent course  of  moral  development. 

All  these  forces  will  combine  in  a  powerful 
current  of  conscious  sentiment,  which  will 
strongly  influence  private  custom  as  well  as  pub- 
lic policy  and  legislative  enactment,  whenever 
these  are  called  into  action  to  modify  or  shape 
economic  institutions  and  convention.  This  senti- 
ment will  frown  upon,  and  condemn  as  unjusti- 
fiable graft,  excessive  salaries  of  the  "higher 
ups,"  both  in  public  and  in  private  employment, 
and  at  the  same  time  demand  increase  in  the 
compensation  of  the  men  furthest  down.  It  will 
influence,  in  a  measure,  private  corporations  in 
this  matter ;  but  influence  more  especially  all  pub- 
lic works  boards,  and  generally  all  public  em- 
ployment, with  the  result  of  a  continuous 
approachment  toward  equality  of  compensation. 


FURTHER  APPLICATION  OF  THEORY.  183 

I  have  pointed  out  in  Chapter  VII.  that  there  is 
even  now  a  distinct  movement  towards  equahza- 
tion,  though  a  very  slow  movement,  and  an  un- 
conscious one;  and  I  have  cited  a  number  of 
instances  to  support  that  assertion.  But  when 
this  movement  becomes  one  that  is  consciously 
advocated,  demanded,  and  promoted,  it  may 
presently  become  quite  rapid;  especially  so  be- 
cause of  wide  extension  of  government  control 
or  interference  with  many  production  and 
distribution  enterprises,  brought  about  by  the 
exigencies  of  the  great  war,  in  all  countries  af- 
fected by  the  same.  Even  aside  from,  and  pre- 
vious to  the  war,  interstate  commerce  and  public 
service  commissions  have  dictated  travel,  freight, 
and  service  rates;  hours  of  labor  and  minimum 
wages  rates;  and  now  the  railroads  are  wholly 
taken  over,  and  we  have  fuel  and  food  directors 
who  control  the  distribution  and  price  of  coal, 
while  Congress  fixes  the  price  of  wheat  and 
sugar;  and  we  hear  threats  of  taking  over  alto- 
gether the  coal  mines  and  the  packing  houses, 
which  would  mean  the  arbitrary  fixing  of  meat 
prices  and  perhaps  the  price  of  live  stock. 

To  fix  the  price  of  a  product  virtually  means 
control  of  the  enterprise  which  puts  that  product 
on  the  market,  and  is  equivalent  to  nationalizing 
such  industry.  All  the  nations  involved  in  the 
great  war  have  taken  a  very  long  step  toward 
nationalizing  their  industries,  a  step  which  after 
the  war  they  can  retrace  only  in  part  if  at  all. 
Nationalization  has  gone  on  apace,  and  will  con- 
tinue to  go  on,  and  with  it  the  number  and  va- 
riety of  government  employes   will  increase  to 


i84  NEW  ERA  SOCIETY. 

immense  proportions;  and  the  fixing  of  rates  of 
pay  becomes  a  more  and  more  vexatious  problem 
which  calls  more  and  more  urgently  for  some 
definite  principle  upon  which  to  base  these  rates, 
rather  than  to  copy  the  rates  prevailing  in  the 
world  of  private  business,  with  these  continually 
unsettled  by  disputes  and  strikes. 

What  principle  can  that  be  but  equality  of  com- 
pensation, the  only  one  that  will  end  the  disputes 
and  the  strife?  And  with  an  ever  increasing 
sentiment  in  favor  of  this,  and  a  demand  for  the 
same,  equality  of  compensation  for  all  kinds  of 
useful  work  of  standard  efficiency,  will  gradu- 
ally become  an  established  fact. 

Whether  men  today  like  it  or  not,  this  is  mani- 
fest social  destiny. 

I  now  close  my  dissertation  with  the  hope  that 
many  a  reader  may  in  these  pages  find  food  for 
thought. 


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